DSE index dips to 28-month low

The prime index of the Dhaka Stock Exchange (DSE) tumbled to a 28-month low on Monday as sharply reacting investors staged a token hunger strike.

DSEX, the prime index of the key bourse, plunged by 62.73 points or 1.20 per cent to settle at 5,175.

It has been the lowest level of index since January 08, 2017 when DSEX was 5,158.

The market capitalisation declined by Tk 388 billion during the past three months.

The DSEX shed 775 points or 13 per cent during the period under review, the DSE data show.

A group of aggrieved investors staged a token hunger strike in front of the DSE building as announced earlier, for four hours starting from 11:00am, in protest against the inaction on the part of relevant authorities to buoy up the market.

Retail investors, under the banner of 'Bangladesh Pujibazar Biniyogkari Oikya Parishad,' holding banners, festoons and placards joined the programme. They chanted slogans, demanding actions to help restore normalcy in the market.

The investors demanded immediate resignation of M Khairul Hossain, the chief of the capital market watchdog, for his failure to bring back normalcy in the market.

The retail investors placed a 12-point demand, including stopping private placement share issue of weak companies, the introduction of buy-back systems and 80 per cent IPO quota for general investors.

They demanded exemplary punishment against the market manipulators behind the market crash in 2010-2011 and an immediate implementation of Financial Reporting Act-2015.

The investors also demanded punitive measure against the sponsor-directors, who failed to hold 2.0 per cent share individually and 30 per cent share collectively in their respective companies.

The aggrieved investors alleged that the regulator continuously failed to address manipulations and wrongdoings in the market, which made them frustrated.

They also censured finance minister AHM Mustafa Kamal for his recent remarks on the capital market.

Rashed Khan Menon, chairman of the Workers Party of Bangladesh, brought the hunger strike to an end by offering juice to the retail investors at around 2:30pm which they drank.

The investors have been staging demonstration for the past one month in front of the DSE building in protest against the continuous fall of indices.

Trading activities also dipped below Tk 3.0 billion-mark and amounted to Tk 2.98 billion on Monday, which was 13 per cent lower than the previous day's Tk 3.44 billion.

Prices of 217 issues declined, 86 advanced and 44 remained unchanged on the DSE trading floor.

The securities regulator held an emergency meeting with stockbrokers, representatives of the DSE Brokers Association (DBA) and the Bangladesh Merchant Bankers Association (BMBA) on Sunday.

The stock market regulator assured top brokers of taking market supportive measures, including making a provision for setting a cut-off to shares issued through IPO and private placements.

However, the news failed to lift the market. The Bangladesh Securities and Exchange Commission (BSEC) also called a meeting with DSE and CSE high ups on Monday evening.

Market analysts cited the lack of investors' confidence, dearth of quality stocks, shortage of liquidity and placement shares as reasons for the latest erosion in stock prices.

They said the falling share prices triggered panic sales, pulling the market further down. The negative remarks from the government high-ups accelerated the fall.

Lower-than-expected dividend and earning disclosures by some companies during the trading session also frustrated the investors , said a leading broker.

Khairul Bashar Abu Taher Mohammed, secretary general of the Bangladesh Merchant Bankers Association, said index hit an abyss , as investors' confidence in the market sapped.

He noted that institutional investors cringed taking a cautious stance due to fund shortages.

The hostile market outlook kept the investors worried, resulting in poor market participation, with the key index closing at 5,175 points level since January 08, 2017, according to International Leasing Securities, a brokerage.

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