Stocks declined again yesterday, as the central bank’s positive step on single borrower’s exposure failed to create enthusiasm among the investors whose confidence is eroding by the day.
Rather, they feared that the market might experience a long-term downtrend in the days ahead. A lack of institutional investors’ participation also led the retailers to go for sell-offs.
The benchmark general index of the Dhaka bourse — DGEN — closed at 5,809 points, after plunging by 31 points or 0.54 percent.
The market started the day with a positive note and gained 35 points at 11:05am amid a buying pressure following the central bank’s circular on single party borrower limit.
The DGEN lost 40 points at 1:20pm as the investors went for a huge sell-offs.
Banks with merchant banks and brokerage houses as subsidiaries will now have until December 31 next year to bring down their exposure to an allowable limit.
According to Bangladesh Bank requirements, banks are not allowed to lend more than 15 percent of their ‘investable’ amount to their subsidiaries as a single-party borrower.
The investable amount is equivalent to 10 percent of a bank’s total liabilities that it can keep as investment exposure to stockmarket.
Ahasanul Islam, senior vice-president of the Dhaka Stock Exchange, said: “The extended time for bringing down the single party borrower limit saved the institutional investors from a panic.”
The market started the day with a momentum but it retraced following the declaration of a daylong shutdown on Thursday called by main opposition BNP, said Islam.
Islam said the value of loan account’s portfolios of the commercial banks and merchant banks should be identified by the central bank to know the situation of investment.
To bring back normalcy in the market, the government should come up with a big fund for a long period to boost the investors’ dampened confidence, he said.
However, top officials of the Securities and Exchange Commission (SEC) yesterday discussed with the parliamentary standing committee on the finance ministry about the current market situation.
Officials of the Investment Corporation of Bangladesh (ICB) and the finance ministry also participated in the discussion.
The parliamentary body asked the stockmarket regulator to help the ICB, said an SEC official.
The turnover on the premier bourse stood at Tk 337 crore yesterday, 9.8 percent lower than that in the previous day.
Beximco was the most active share in terms of turnover with 8.54 lakh shares worth Tk 12.88 crore changing hands.
Pharma Aids was the biggest gainer of the day as it posted a 4.9 percent rise, while Modern Dyeing and Screen Printing was the worst loser, plummeting by 4.54 percent.
The Chittagong Stock Exchange also declined yesterday with the Selective Categories Index, CSCX, closing at 10,557, after slumping by 23.05 points or 0.22 percent.
The port city’s bourse traded more than 63.98 lakh shares and mutual fund units worth Tk 43.39 crore. Losers beat advancers 96 to 77. Twelve securities remained unchanged.
-With The Daily Star input
