The long-brewing anger of the retail investors intensified further on Thursday as the Dhaka stocks plunged for the third day at a stretch, with all the government measures failing to stabilise the capital market, operators said.
The general index of Dhaka Stock Exchange slid 217.54 points, or 3.61 per cent, to 5,800.93 points at the end of the day as panic-stricken retail investors continued to sell off shares and institutional investors sit on the fence waiting for the market to slump further, creating an opportunity for them to buy shares at giveaway prices, they said.
The DSE general index, DGEN, had lost as many as 588 points in past three days.
The index had dipped in the previous two days mainly because of the selling pressure from a section of investors who had decided to leave the market for good but the two-day bear run also made the rest of the small investors jittery and lose whatever hope they still retained, the market operator explained.
Almost all retail investors lambasted the government on Thursday for making ‘empty promises’ of keeping the market stabilised.
‘The government is making fools of small investors like us by giving us hope and issuing fancy directives,’ said Jahid standing in front of the DSE building. ‘But, when it comes to facing reality, they are entirely incapable of accomplishing
any thing,’ he added in harsh tone.
Finance minister AMA Muhith in last week announced a number of government measures for stabilising the securities market. The measures include asking the state-run commercial banks and allocating a Tk 200 crore fund to the Investment Corporation of Bangladesh to buy shares from the stock market.
‘If the government does not know how to stabilise the market, why does not it admit that,’ said an angry investor in front of the bourse. ‘The people in power must admit their responsibility and stabilise the market at any cost,’
When the DGEN dropped by 253 points at around 2:25pm, investors in different brokerage houses in Motijheel, roared simultaneously in anger, producing a sound like a thunder that made the windowpanes and loose fixtures in the buildings of the area shake and vibrate, instilling in many people the fear that a street demonstration was in the offing.
The trading at DSE, however, closed without any untoward incident on the last day of the week.
The police, however, had kept movement of buses and cars on the roads in the area from 1:00pm to the end of trading at 4:00pm fearing a street protest.
Retail investors in the previous two weeks had gone on rampage in Motijheel area, a commercial hub of the capital, time and again in protest against a relentless slide in share prices. They vandalised a number of vehicles and business establishments, set fire to a high-rise, and staged rowdy demonstrations almost on every trading day of the first and second week of this month.
The turnover of the bourse on Thursday fell further to Tk 559.25 crore from 573.67 crore on Wednesday because of the continued liquidity crisis.
Experts said the reluctance of institutional investors to become active in trade made the retail investors nervous yet again. Although the government had announced to make the institutional players become active in the market soon but this week’s market trend
gave a different picture, they said.
A high official at an asset management company told New Age categorically, ‘We know at what condition we had invested in the market and it is for us to decide what we should do about that.’
Explaining constrains of such institutions, he said, ‘As an institution, we cannot act contrary to our investment policy and assessment of the market.’
‘We really lack funds to invest in the market at the moment,’ he added.
A market analyst, however, questioned the validity of the claim of liquidity crunch made by the institutional investors.
Market analyst Akter H Sannamat said, ‘The institutional investors continue to remain inactive in the market and this discourages retail investors as well.’
‘If the financial institutions took money out of the stock market then the claim of liquidity crisis cannot have any justification,’ he pointed out.
‘And if they are facing such a crisis, the authorities must examine where the money has gone as it just cannot vanish from the channel,’ he added.
Many of the market players alleged that the institutional investors actually were waiting for the general index to collapse further before going for investment
Courtesy of New Age