Cautious trading by retail investors and inactivity of the institutional ones kept Dhaka stocks in the negative zone last week amid a significantly low volume of transactions, stretching the current bear run to four straight weeks.
Last week, the benchmark general index of Dhaka Stock Exchange, or DGEN, lost 94.84 points, or 1.53 per cent, to close at 6,118.02 points, the level from which it had started its journey on Sunday. In the previous week the index shed 47.04 points, or 0.75 per cent.
The average daily turnover of Dhaka bourse posted a sharp fall in last week, dropping by 22.90 per cent to Tk 391.72 crore as the market was in the grip of a liquidity crisis due mainly to a lack of confidence among the investors. In the previous week the average daily turnover of the DSE was Tk 508.08 crore.
Market operators said the market was facing a liquidity crisis as the prolonged volatility in the market for the past one month made most of the investors backtrack.
They said investors were yet to recover from the trauma of January’s stocks debacle.
‘After the stock market crash in January, the investors became highly sensitive about the market trends as they are still in loss,’ said a stockbroker.
‘In last week retail investors were sceptical about any positive development in the market and the institutional investors continued to sit on the fence,’ he said.
‘The big market players and the institutional investors are waiting for the price level to dip further to buy shares at low rates, while the retailers are waiting to take their cue from the big fishes,’ he explained.
He said the increased need for cash ahead of the Eid was also a reason for the market facing the liquidity crunch.
The daily turnover of the bourse posted a record high of the year in July-August but it has been decreasing for the last four weeks amid a fresh volatility in the market. On July 24 the turnover rose to Tk 1,957.92 crore from that of Tk 954.84 crore on June 30 following the passage in parliament of the provision of allowing investment of undisclosed money in the equities market subject to payment of a 10 per cent tax.
Finance minister Abul Maal Abdul Muhith in last week said the government was making some changes to the statutory regulatory order relating to money-whitening to stop investment of money laundered or obtained through terror routes in the capital market.
In last week the investors staged street demonstrations on two days to protest the steep fall in share prices. They demanded immediate resignation of the finance minister for his failure to stabilise the capital market.
Instead of five, the bourse had four trading sessions in the week as Monday was closed on the occasion of National Mourning Day.
On Sunday, the DGEN lost 0.65 per cent, or 40.56 points, and the turnover dropped to a one-and-a-half-month low of Tk 439.89 crore.
The DGEN on Tuesday lost 60.02 points, or 0.97 per cent, while the turnover dipped further to Tk 354.29 crore.
On Wednesday the fall in share prices extended with the general index, shedding 1.11 per cent, or 68.35 points, which prompted the general investors to took to the streets in protest. They also went for panic-selling on the day that boosted the turnover of the bourse to Tk 435.67 crore.
Dhaka stocks posted a sharp rise on Thursday, with the DGEN gaining 74.09 points, or 1.22 per cent. But, the turnover on the day dropped to a two-and-a-half-month low of Tk 337.02 crore.
The weekly tally of DSE shows 34 gainers, 223 losers, and eight unchanged of the total 265 issues traded.
United Airways topped the list of turnover leaders of the week, with its shares worth Tk 66.19 crore changing hands. The rest of the turnover leaders on the Top-10 list included Beximco Limited, Square Pharma, Lafarge Surma Cement, MI Cement, Malek Spinning, GP, Keya Cosmetics, City Bank, and Fu-Wang Food.
-With New Age input