The country's premier bourse suffered a big jolt on Monday as its prime index plunged to a 30-month low.
DSEX, the core index of the Dhaka Stock Exchange (DSE), plunged by 88 points or 1.70 per cent to settle at 5,091.
It is the lowest level of the index since January 01, 2017, when DSEX dropped to 5,083.
The index shed 330 points or 6.08 per cent within 10 trading sessions after the budget for this fiscal year (FY) 2019-20, was passed.
The market capitalisation also lost Tk 211 billion during the period under review, the DSE data show.
A group of aggrieved investors staged demonstration in front of the DSE building on Monday in protest against the inaction of the authorities concerned to buoy up the market.
The retail investors, under the banner of 'Bangladesh Pujibazar Biniogkari Oikya Parishad,' chanted various slogans, demanding immediate actions to help revive the market.
They also demanded immediate resignation of M Khairul Hossain, Chairman of the Bangladesh Securities and Exchange Commission (BSEC), for his failure to bring back normalcy in the market.
The aggrieved investors alleged that the capital market regulator has failed to address the problems of manipulations and wrongdoings in the market, which made them frustrated.
Market analysts, meanwhile, cited lack of investors' confidence, dearth of quality stocks, shortage of fund, and suspension of trading the People's Leasing and Financial Services Limited (PLFSL) as reasons for the latest erosion in stock prices.
They said gradual fall in share prices triggered the panic sale, pulling the market further down. The Bangladesh Telecommunication Regulatory Commission(BTRC)'s strict stance on the Grameenphone (GP) coupled with the latest gas price hike accelerated the free fall.
Khairul Bashar Abu Taher Mohammed, secretary general of the Bangladesh Merchant Bankers Association (BMBA), said the core index slumped to 30-month low, as the investors' confidence in the market sapped.
He noted that the investors are already grappling with several issues, such as - imposition of extra tax on listed companies, the GP's clash with the telecom regulator, and the latest gas price hike etc.
Now, they have become further panicked by the news of liquidation and subsequent trading suspension of the PLFSL.
Mr Bashar, also CEO of the MTB Capital Ltd, opined that institutional investors maintained a cautious stance due to fund shortage.
Although the government brought some changes to the budgetary measures for the capital market, these failed to make any positive impact on the market.
"The stock investors are not happy with the budgetary measures, as there is no incentive for them. Rather, the listed companies are being burdened with more tax," Dr A B Mirza Azizul Islam, former caretaker government adviser, told the FE.
Mr Islam, also a former chairman of the capital market regulator, said good companies might face problems due to imposition of 10 per cent extra tax on stock dividend in case of expansion.
He emphasised bringing more reputed and good companies to the market for restoring the investors' confidence.
Mostaque Ahmed Sadeque, former president of the DSE Brokers Association (DBA), said the investors are not confident enough of injecting fresh funds into stocks amid a dismal market outlook.
Growing concern over the GP's dispute with the telecom regulator along with lower dividend payout disappointed the investors. As a result, the company lost 5.89 per cent in value on Monday, leading the fall of the broad index, held the UCB Capital Management Ltd.
The GP shares plunged 5.89 per cent on the day, which was a huge blow to the market, as it alone contributed to more than 43 points fall of the DSE prime index.
Turnover, another important indicator of the market, stood at Tk 3.06 billion on the day, which was 14 per cent lower than the previous day's turnover of Tk 3.54 billion.
Prices of 86 per cent traded issues declined on the DSE trading floor, as out of the 352 issues traded, 303 closed lower, 37 advanced, and 12 remained unchanged.
© 2024 - All Rights with The Financial Express
