Dhaka Stock Exchange (DSE) prime index suffered Sunday the largest single-day fall by 133 points in four and a half years amid "panic sale" of shares, attributed to political tensions.
At the end of the trading session on the first day of the week, DSEX, the main index of the premier bourse, plummeted to 5,888 from 6,021 points in the previous session.
With Sunday's biggest fall in years, the DSE broad index, DSEX, plunged 288 points or 4.66 per cent in four successive sessions, stockbrokers and investors said.
On June 9, 2013, the DSE key index slumped by 145 points or 3.60 per cent.
Merchant bankers and stockbrokers in their immediate reaction held panic sales of shares by many investors following 'political rumours' responsible for the market turmoil.
"The market continued to fall for the four consecutive days as a section of panicked investors disposed of shares," president of the DSE Brokers Association Mostaque Ahmed Sadeque told journalists after an emergency meeting with the bourse's top brokers following the big fall.
The meeting was held on the DSE premises for a post-mortem on the stock-market situation which a noted economist linked with tensions stemming from the upcoming verdict in a graft case involving former premier and BNP chief Khaleda Zia.
Mr Mostaque said: "Political rumour' spread by a vested quarter continued to panic investors for the last few days, prompting the investors to sell off their shares."
He finds "no valid reason" for the fall and there is no relation between the plan to cut the ADR and the market fall either.
Bangladesh Merchant Bankers Association (BMBA) President Mohammed Nasir Uddin Chowdhury urged the investors not to go for a panic selloff of stocks.
"It is a proper time for buying shares," the BMBA president told the journalists.
He said they will submit a set of recommendations to the securities regulator, the central bank and the ministry of finance shortly.
They also urged proper calculation of banks' capital-market- exposure limit in view of the present situation of the market.
The merchant bankers also urged the government to strengthen the investment capacity of the Investment Corporation of Bangladesh (ICB) to support the market.
On Wednesday, the DSEX shed 88 points. Following the sharp decline that day, the DSE Brokers Association (DBA) and the merchant bankers also held an emergency meeting and observed that the market fell as a 'political rumour' spread by vested quarters created panic among the investors.
When contacted, former finance adviser to caretaker government Dr AB Mirza Azizul Islam said such market fall might have been caused due to some panic among the investors cantering round the ensuing verdict on the Zia Orphanage Trust graft case against BNP Chairperson Khaleda Zia.
The economist also finds no valid reason for the investors to get panicked.
"But I don't see any valid reason that they (investors) sell out their shares after being panicked ahead of the verdict," said Mr Islam, also former chairman of the Bangladesh Securities & Exchange Commission.
He went on: "As I said earlier that the latest monetary policy statement of the central bank is market-friendly one and it might not create any adverse impact on the market."
He earlier had told the FE that there was no justification for getting panicked over the money supply despite the lowering of the limit of banks' advance-deposit ratio as the central bank raised the private- sector-credit-growth target.
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