Key index plunges 3.39pc on panic sales
The stockmarket regulator sits with all stakeholders today after stocks plunged by more than 3 percent yesterday, maintaining the recent falling trend in share prices.
The fall was due to panic sales amid a lack of confidence among investors.
“The commission called a meeting with stakeholders, including the bourses, merchant banks, asset managers, stockbrokers, dealers and bank brokerage houses to discuss the current market situation,” said an official of the Securities and Exchange Commission.
“The meeting will try to find ways to bring back confidence in the market,” the official said, adding that if confidence can be restored, the flow of liquidity will gain pace.
The key index of the Dhaka Stock Exchange, DGEN, came down to 5,533 points, after declining by 194 points or 3.39 percent, the highest fall since June 12 when the index shed 5.23 percent.
Analysts blamed the current bearish trend on the continuously eroding confidence of the retail investors.
The investors fear further instability in the market and that is why they are selling off shares hastily, they said.
Institutional investors are yet to become active in the market as some groups are possibly trying to push the market down, so that they can later buy shares at low prices, said an analyst.
A group of investors brought out a rally in front of the DSE building at 1:45pm yesterday under the banner of ‘Share Market Investors Unity’. They urged the government to take action to bring back normalcy in the market.
The regulator has taken a series of initiatives to boost investors’ confidence as per demands made by the stakeholders earlier, said another SEC official.
He also said the market regulator and the central bank took some positive regulatory measures such as banning share sales by sponsors, withdrawing mutual funds’ sectoral investment restriction, and extending the timeframe to adjust merchant banks’ single borrower exposure limit.
A flow of liquidity from the institutional investors is important to stabilise the market, he added.
News of a worsening economic situation is making the investors shy away from stocks, said LankaBangla Securities.
The SEC official said rising inflation, a low inflow of remittances and the government’s dependency on bank loans also pushed the stocks down.
A total of 95,006 transactions took place at yesterday’s trading, generating a turnover of Tk 324 crore, a 9.72 percent rise from the previous day. Of the total 263 issues traded on the DSE, only 20 advanced and 239 declined.
All the sectors lost: banks went down by 3.78 percent, non-bank financial institutions 3.79 percent, telecommunication 3.72 percent, pharmaceuticals 2.74 percent and power 3 percent.
The Chittagong Stock Exchange also declined yesterday with the Selective Categories Index, CSCX, going down 335 points or 3.25 percent, to end the day at 9,992.
– With The Daily Star input
