Stocks sputter as confidence at low ebb

Dhaka stocks suffered a big jolt yesterday with the highest number of companies losing their share prices in the history of Bangladesh stockmarket, as investor confidence dipped to a new low.
The prices of 89 percent securities declined. Of the 240 traded companies, 214 took a nosedive, while only 24 securities advanced. However, two scrips remained unchanged.
The stockmarket suffered its second biggest jolt on January 19 last year when 210 companies had racked up losses.
The benchmark index of Dhaka Stock Exchange, DSE General Index (DGEN), yesterday lost more than 124 points, or 2.26 percent, before finishing the day at 5,375.07.
The DGEN, introduced in 2001, witnessed the single-day largest fall on February 22, declining by 138 points or 2.39 percent.
Analysts say it is another day of a bearish spell that continued on the bourses for the last three weeks.
They said the participation of investors dropped significantly, as investors remained in panic and adopted a ‘wait-and-see’ approach.
“This sluggishness in market can be attributed to a reduction in margin loans, controversy surrounding DSE election, action against so-called gamblers, anxiety expressed by the government regarding the overheating of the market and SEC’s quashing of stock dividend and right shares declared by AIMS 1st Mutual Fund,” AIMS of Bangladesh, an asset management company, said in a market analysis.
Liquidity flow almost halved, compared to the first two months, it pointed out, adding that it is however too early to say whether the current declining trend is a small pullback after a long bullish trend or the market is lurching towards a painful deep correction.
The single-day turnover came down to a six-month low at Tk 623.80 crore on transactions of 2,97,21,669 shares on the prime bourse.
Many investors also said they abstained from trading, as they found the Securities and Exchange Commission’s intervention and instruction unnecessary and unexpected.
Chittagong stocks also marked a sharp fall. The CSE Selective Categories Index went down 209.98 points, or 2 percent to 10,248.79. The CSE All Share Price Index dropped 315.96 points, or 1.97 percent to 15,664.

Courtesy of Star Business Report