A panic caused by a rumour that some of the heavyweight players were going for massive disinvestment following the news that the Securities and Exchange Commission was preparing to take legal actions against market manipulators during the last stocks debacle pulled down the Dhaka stocks on Monday.
The benchmark general index of the Dhaka Stock Exchange, or DGEN, took a 92.02-point or 1.42 per cent plunge to close the day at 6,367.59 points. The index lost 128 points on Sunday.
The volatile trading on Monday stretched the bearish market trend to six straight days.
A large number of investors became cautious in trading on the day following Sunday’s SEC announcement that it would lodge cases against a number of suspected market manipulators who were behind the January’s stock market crash.
The turnover of the bourse on Monday dropped to Tk 1,005.56 crore, down by Tk 336 crore from that of the previous day.
Market operators said general investors became jittery once again as share prices continued to fall for the past six trading days. They said, although the recent market fall started with a regular price correction, a rumoured move for disinvestment by a number of large investors aggravated the situation in the past two days.
‘Some big market players might go for heavy selling to pressure the regulator into refraining from taking action against them,’ remarked a stockbroker. He said such a move by the big fishes might also prompt the retail investors to go for heavy selling.
The latest negative trend was initially fuelled by the government move of offloading more shares of the sate-owned enterprises listed with the capital market and poor quarterly disclosures made by a number of banks. The monetary policy for the first half of the current fiscal year announced by the Bangladesh Bank made the situation even worse.
Investors on Monday also expressed their concern at the share prices going into a free fall.
‘I sold some of my shares today as the latest trend may last long,’ said Harun-ur Rashid, a small investor. If a number of large market players go for disinvestment, the market will fall further, he said.
Rashid, however, is also of the opinion that the market manipulators should be brought to justice. ‘We may suffer initially but they should be tried,’ he said.
AIMS Bangladesh Ltd managing director Yawar Sayeed said, ‘If the investors get caught in the cobweb of rumours and go for selling shares, it will only help a vested quarter. So, they should not panic.’
He said a number of moves including the central bank’s monetary policy, the news on possible regulatory actions against market manipulators in a short span of time had pushed the market into volatility but it would not last long.
On Monday the DGEN had fluctuated heavily in the opening hours but it started crawling down from the middle of the session and ended the day in the negative territory.
Of the 261 issues traded on Monday, 41 advanced, 207 declined, and 13 remained unchanged.
Beximco topped the list of the day’s turnover leaders, with its shares worth Tk 63.26 crore changing hands. The rest on the Top-10 list were RN Spinning, Maksons Spinning, Lafarge Surma Cement, Summit Power, MI Cements, National Bank, MJL Bangladesh, and
-With New Age input