Photo: Collected
The capital market passed another week with prices falling on most days. Due to this fall in prices, investors lost capital of Tk 4,144 crore in the week, according to information from Dhaka Stock Exchange (DSE) sources.
According to the DSE data, trade took place on a total of five business days from April 26 to 30. In these five days, prices fell on three days and the index increased on two days. Investors lost Tk 4,144.63 crore last week as the share prices of most companies fell.
Out of the 115 companies that were traded last week, the share prices of 248 companies fell against the increase. The share prices of 27 companies were unchanged. The main index of DSE fell by 60 points to 5,251 points. As the index fell, investors' capital fell by Tk 4,144.63 crore to Tk 6,48,922 crore. Tk 6,530,66.72 crore was investors’ capital in the previous week.
Not only investors suffered, but the business of the owners of the brokerage houses also decreased. The average daily transactions last week were Tk 390 crore. The previous week's daily transaction was Tk 517 crore.
Shares of the jute sector were traded last week sector-wise. 10.29 per cent of the total trade of shares were in this sector. After that, IT sector shares were traded, which was 4.69 per cent of total transactions. Financial institutions, paper & printing, and insurance sectors were also at the top of trade.
AIL, IFIC, ORIONPHARM, MPETROLEUM, LOVELLO, UNILEVERCL, RUPALILIFE, RELIANCE1, ORIONINFU and ASIATICLAB were the top gainers. BIFC, GHCL, KPPL, HAMI, CAPMBDBLMF, FIRSTFIN, SONARGAON, RUPALILIFE, MATINSPINN and TUNGHAI were the top 10 companies witnessing price rise.
The Chittagong Stock Exchange (CSE), the other capital market of the country, saw trade of shares of Tk 266 crore. Shares of 323 companies were traded. Among them, the prices of 73 companies increased, 225 companies decreased, and 25 companies remained unchanged. The main DSE index fell by almost 400 points to 15,072 points as most of the shares fell.
After the imposition of bottom circuits by 3per cent in a single trading day, a large number of stocks listed on the bourses witnessed a significant price erosion of up to 53 per cent while 20 stocks saw over 20 per cent price erosion.
In a bid to arrest the downward spiral in the stock market, prompted by the removal of a significant regulatory curb – the floor price, the Bangladesh Securities and Exchange Commission (BSEC) on 24 April imposed a bottom circuit.
The directive mandated that no stock can experience a decline of more than 3 per cent per day, significantly narrower than the previous 10 per cent limit, across both the Dhaka and Chattogram bourses. Since then, stocks traded for 25 days — 17 days witnessed a fall with a significant decline in indices and turnover and an eight-day rise.
In the trading sessions, 308 stocks' prices, which is equivalent to 78 per cent of the total stock traded on the bourse, fell at a range of 53 per cent to 0.1 per cent. On the contrary, only 76 or 19.19 per cent of the stock saw a rise in price up to 77 per cent to 0.4 per cent until 29 May, according to an analysis of Royal Capital.
Stockbrokers attributed that the regulatory intervention to curb the price fall backfired on the artificial price movement mechanism, which sparked the instability of the market, and shares selling-off significantly rose.
When the economic conditions are not in a comfortable situation, besides that interest rates have been rising, then the stock market witnessing a fund diversion to other investment tolls like government treasury bills and bonds. That is why, the stock market has been passing a volatile situation that resulted in a significant fall in indices and turnover.
Messenger/Fameema
