Stocks plunge ahead of stimulus announcement

Speculation over non-inclusion of CRR, SLR reduction spread panic
Dhaka stocks plunged by 224 points on Wednesday in late panic-driven selling following a rumour in mid-session that the government’s stimulus package which would be announced after trading hours would not include reduction of banks’ cash reserve requirement and statutory liquidity ratio.
DGEN, the benchmark general index of the Dhaka Stock Exchange, on the day lost 4 per cent, or 224.30 points to close the day at 5,372.65 points.
In the previous four sessions, the index gained 947 points as prime minister Sheikh Hasina last week intervened to bring back stability in the market following 560 point plunge in three days when the market reopened after nine days of EID holiday.
On Wednesday, the DSE turnover crossed Tk 1,000-crore mark, to Tk 1,051.39 crore, for the first time after July as investors went into heavy selling.
The market opened with optimism on Wednesday as the DGEN gained around 150 points in 45 minutes after the trade began.
But after mid-hour, the DGEN nosedived when a rumour spread that the Securities and Exchange Commission which was scheduled to announce a stimulus package for investors who had sustained heavy losses in 11-month depression would not include reduction of banks’ cash reserve requirement and statutory liquidity ratio in the package.
Besides, some investors also became jittery after a news broke that the High Court had scrapped a petition by three former officials of a brokerage house to be relieved of a 1996 stock scandal case.
‘Investors knew that tussle was going on between Bangladesh Bank and SEC over the reduction of the CRR and SLR. But investors hoped that BB would reduce CRR and SLR, even if it is by a little margin, following the prime minister’s intervention,’ said a stock broker.
He said investors went for a panic-driven sell-offs in late trading as most of the retail investors considered lowering CRR and SLR as the most vital booster for the market.
‘There was a rumour in the market during Wednesday mid-hour that the stimulus package might not contain lowering CRR and SLR, and the retail investors reacted negatively,’ he said.
In some cases, there were very few sellers for many scrip in early trade and in late trading there was no buyer for the same scrip.
The SEC chairman in the afternoon announced the stimulus package without any announcement on reduction of CRR and SLR.
In December 2010, the Bangladesh Bank increased the CRR from 5.50 per cent to six per cent and the SLR from 18.50 per cent to 19 per cent to curb inflation.
Dhaka Stock Exchange suffered the first stocks crash in December-January last, when its general index lost more than 1,000 points. It has been alleged that heavy share sales by the banks to comply with the central bank’s regulations, increase their CRR and SLR, and reduce single-party exposure to the allowable limit of 10 per cent of their liabilities by August, caused the crash.
After the prime minister last week asked stakeholders including BB and SEC to come up with a stimulus package for investors, the SEC in the last few days negotiated with the central bank about lowering the CRR and the SLR but the BB turned down its proposal considering its macro-economic impact.
Mahmood Osman Imam, a professor of finance at Dhaka University, said, ‘The government might be concerned about the macro-economic effect of the matter and perhaps could not consider the proposal for now.’ 
He, however, said, ‘Although the index plunged, the rise of turnover was still positive.’
Akter H Sannamat, a market analyst, said, ‘Profit taking motive of some investors following the surge of share prices in the last few days compounded with speculation on stimulus package taking the market down below the expected level of price correction today.’
He said the stimulus package was certainly a booster for the market and the investors should behave rationally to carry on the momentum.
‘The government proved its concern about stabilising the market and now  the investors should play their game with safe hand,’ he said.
He also said that investors should not get panicked about any such case that includes only few people.
‘The investors can play a major role in the market and should not be concerned about any case that includes a few people.’  
Of the 259 issues traded on the day, 24 advanced, 233 declined, and two remained unchanged.

-With New Age input

Related News

DITF concludes with export orders of around Tk 300 crore

Business Desk : The 27th Dhaka International Trade Fair-2023 ended on Tuesday with businesses receiving export orders worth about $30.38 million (about Tk 300 crore) while goods worth Tk 100 crore were sold in the month-long exhibition at the Bangabandhu Bangladesh-China Friendship Exhibition Centre at Purbachal in Dhaka. A total of 47 businesses received ... Read more

Belal Ahmed now SIBL’s acting chairman

Business Desk : Social Islami Bank Ltd (SIBL) has appointed Belal Ahmed as the acting chairman of its board of directors after Md Mahbub Ul Alam resigned. Previously, he served the bank’s board as vice-chairman. Ahmed is the son-in-law of Mohammed Saiful Alam, the chairman of Chattogram-based S Alam Group. He represents Unitex Steel ... Read more

Walton sees Tk 566cr sales drop in six months

Business Desk : Walton Hi-Tech Industries PLC, the largest electrical, electronics and home appliance manufacturer in Bangladesh, posted lower sales and profits in the first half of the current financial year due to higher inflation and the dearer US dollar amid the ongoing global economic crisis. The sales dropped by Tk 566 crore, or ... Read more

Phone producers must preinstall Bijoy app, although users are under no obligation: Jabbar

Business Desk : Preinstallation of Bijoy app on android phones is still mandatory for the importers and manufacturers of the devices, but it is not obligatory for the users to use the Bangla writing software, Telecom Minister Mustafa Jabbar said today. The Bangladesh Telecommunication Regulatory Commission (BTRC) has not changed its stance over the ... Read more

‘Richest 1% seize two-thirds of fresh $42 trillion created since 2020′

Oxfam report says Business Desk : A new Oxfam report shows that the top 1% of the world’s wealthiest people have taken almost two-thirds of the $42 trillion in new wealth that has been created since 2020. This is almost twice as much money as the bottom 99% of the world’s population has. A ... Read more

‘Richest 1% seize two-thirds of fresh $42 trillion created since 2020′

Oxfam report says Business Desk : A new Oxfam report shows that the top 1% of the world’s wealthiest people have taken almost two-thirds of the $42 trillion in new wealth that has been created since 2020. This is almost twice as much money as the bottom 99% of the world’s population has. A ... Read more

Puma extends footprint

Business Desk : The global footwear and apparel giant Puma has opened a flagship store in Chattogram, Bangladesh. With the new one, the total number of showrooms of Puma in Bangladesh rises to four. The brand has three outlets in Dhaka, launched by DBL Group, the franchise partner of Puma in Bangladesh. Bangladeshi cricketer ... Read more

First time gold prices exceed Tk 93,000 per bhori

Business Desk : The Bangladesh Jewellers’ Association (Bajus) has decided to raise gold prices for a third straight week, effective tomorrow. According to a press release issued by Bajus yesterday, the price of one bhori (11.66 grams) of 22-carat gold has increased by 3 percent, to around Tk 93,400, as of today. It said ... Read more

Tk 351 crore apartments, plots sold, booked in REHAB Fair 2022

Business Desk : Flats, plots and commercial spaces worth around Tk 351.16 crore were sold and booked in the 22nd edition of the REHAB Fair, which ended today. Of them, Tk 168 crore came from the sales and booking of flats, Tk 80 crore from plots and Tk 53.73 crore from commercial spaces, according ... Read more

StanChart wins The Banker’s ‘Best Bank award

Business Desk : Standard Chartered Bangladesh was recently named as the “Best Bank in Bangladesh” by The Banker magazine’s Bank of the Year Awards 2022. The Banker provides economic and financial intelligence for the world’s financial sector, combining in-depth regional and country coverage with reports on markets, banking, regulation, risk, transactions and technology and ... Read more

10 new products require BSTI certification

Business Desk : Bangladesh Standards and Testing Institution (BSTI) has added 10 new products to the list of items that need to be certified by the national standards body. The new products are: disposable diapers, facewash, petroleum jelly, flatbread/tortilla, shaving foam or gel, eye care, hair dye liquid, aerosol, shoe polishing and geyser. The ... Read more

Walton introduces hire purchase and family protection

Business Desk : Walton has launched a hire purchase and family protection policy along with a one-stop service solution. SM Mahbubul Alam, managing partner of Walton Plaza, inaugurated the ‘Hire Purchase and Family Protection Policy’, ‘One-stop Service Solution’ and ‘Hire Purchase and Family Protection Week’ at a programme held at Walton Corporate Office in ... Read more

ICAB, auditor general office to exchange knowledge

Business Desk : The Institute of Chartered Accountants of Bangladesh (ICAB) and the Office of the Comptroller and Auditor General (OCAG) of Bangladesh signed a memorandum of understanding (MoU) recently to sharing knowledge by jointly developing and introducing courses and programmes.  The two entities will also work towards developing customised training programmes and disseminating ... Read more

Shahjalal Islami Bank gets first place in 22nd ICAB National Award

Business Desk : Shahjalal Islami Bank has won first position for the best presented annual report-2021 at the 22nd ICAB National Award recently. Mohammed Younus, chairman of the bank, Mosleh Uddin Ahmed, managing director, and Md Jafar Sadeq, chief financial officer, received an award from Commerce Minister Tipu Munshi at Pan Pacific Sonargaon Dhaka, ... Read more

Islami Bank wins ICMAB Best Corporate Award 2021

Business Desk : Islami Bank Bangladesh Limited IBBL won the ICMAB Best Corporate Award 2021 for “Private Commercial Bank (Islamic Operation)”. Commerce Minister Tipu Munshi handed over the award to Muhammad Qaisar Ali, additional managing director of the bank Thursday (1 December) at a ceremony held at Hotel InterContinental Dhaka. JQM Habibullah, additional managing ... Read more

Brac Bank holds fire safety awareness sessions during Fire Service Week

Business Desk : To observe Fire Service Week, Brac Bank held a fire safety awareness event for its people in conjunction with the Fire Service and Civil Defence Department. The bank arranged a fire safety drill at its head office in Dhaka on 17 November, said a press release. The department observes Fire Service ... Read more

Premier Cement Mills PLC obtains ICMAB ‘Gold Award’ for cement manufacturing

Business Desk : Once again, Premier Cement Mills PLC has taken home the Gold in the Cement Manufacturing category at the ICMAB Best Corporate Award 2021. Mohammed Amirul Haque, managing director of Premier Cement Mills PLC, received the award from Commerce Minister Tipu Munshi at a city hotel on 1 December.  Among others Federation ... Read more

IPDC Finance took home “gold” for ICMAB Best Corporate Award 2021

Business Desk : IPDC Finance was honored with the Gold Award in the NBFI category at the ICMAB Best Corporate Award 2021. The awards event took place on Thursday, December 1 at the Intercontinental Dhaka, said a press release issued in this regard. Commerce Minister Tipu Munshi handed over the awards to the recipients as ... Read more

Agora, BD Recycle Technologies to work on solid-waste management 

Business Desk : Agora Limited has recently joined hands with BD Recycle Technologies Limited (BRTL) to work together with the goal of ensuring sustainable solid-waste management. A memorandum of understanding has been signed in this regard, where these two institutions will work towards environmental protection through modernisation of waste management, reads a press release. ... Read more

ICMAB Best Corporate Award goes to 65 firms

Business Desk : A total of 65 businesses were awarded the “Best Corporate Award 2021” by the Institute of Cost and Management Accountants of Bangladesh (ICMAB) for their efforts in establishing corporate governance. After examining each company’s annual report, the ICMAB presented them with honors Thursday night at a local hotel during its annual ... Read more