All hopes lost, stock investors want BSEC chief to go, PM to intervene

Investors have lost patience watching storm clouds hanging over the stock market for years and so on Tuesday took to the streets in the capital demanding resignation of the chief of the securities regulator.
While they were chanting slogans accusing the regulator of inaction against market manipulation and fraudsters, the broad index of the Dhaka Stock Exchange (DSE) continued its slide down by more than 41 points for the day to 5,633, lowest since May 2021.
Certainly, the meeting that the high-ups of the Bangladesh Securities and Exchange Commission (BSEC) held the day before with market stakeholders made no positive impact on the bourses.
The meeting had discussed how the market could be supported to the benefit of investors against the backdrop of a persistent downward spiral of stocks since the withdrawal of floor price.
After 18 months of stocks being stagnant, the market went into a correction mode when freed of the price restriction and has continued to remain so, save few exceptions. At the same time, rising interest rates gave rise to an unfavourable climate for fresh investments on stocks.
Macroeconomic uncertainties, stemming from the recent Middle Eastern crisis, further unnerved investors.
Against the backdrop, it is difficult to hope that there will be sunshine to push through the dark clouds soon, which is why jittery investors dumped their holdings from the beginning of the Tuesday's session, driving the market indices down.
Price erosion of large-cap stocks contributed largely to the 0.73 per cent plunge of the DSE.
Beacon Pharma, BAT Bangladesh, IFIC Bank, United Commercial Bank, and ADN Telecom Bank suffered the biggest losses. They jointly accounted for one-third of the day's index fall.
The key index lost 703 points while the market capitalisation shed Tk 844 billion since the floor price removal in January, the DSE data shows.
Investors protest
Aggrieved investors under the banner of "Bangladesh Capital Market Investors Association (BCMIA)" staged a demonstration in front of the DSE old building in the capital's Motijheel around noon.
They demanded immediate resignation of the chief of the capital market watchdog for what they said was his failure to bring back normalcy in the market.
They said the securities regulator could not curb stock manipulation and failed to punish wrongdoers, leaving small investors to suffer and lose their money.
Protestors likened this year's market plunge to the 1996 and 2010 stock market debacles.
"This happened because of the failure of the regulatory bodies," said one of the protesters, adding that they were compelled to take to the streets.
While the capital markets around the world are on the rise, Bangladesh's stock market has continued to bleed, protestors said.
They demanded that companies with weak fundamentals be not allowed to float IPOs, saying such organisations come to the market only to rob investors of money.
Prime minister's intervention was also sought for market stability.
Prof Abu Ahmed, former chairman of the economics department at the University of Dhaka, said the rising interest rate was the major reason behind the present market downturn.
"The growing deposit rates and the higher return from Treasury bonds are luring savers to the money market from the stock market," he said.
Institutional investors are still reluctant to buy good stocks even though they are undervalued. "Until the interest rate comes down to a rational level, investors will not invest heavily on stocks," Prof Ahmed added.
The maximum lending rate jumped to 13.55 per cent for April as SMART (six-month moving average rate of Treasury bills) rose to 10.55 per cent from 9.61 per cent the month before.
Usually, the market tends to weaken when interest rates rise and funds are diverted to the money market.
However, DBA President Saiful Islam said the interest rates of Treasury bonds had become somewhat stable, which would help the market gain stability in near future.
The blue chip index DS30, a group of 30 prominent companies, also shed almost 4 points to 1,980 while the DSES Index, which represents Shariah-based companies, lost 7 points to 1,235.
Turnover, a crucial indicator of the market, was Tk 5.97 billion, slightly up from the day before amid a selling pressure.
More than 72 per cent traded shares saw price fall. Out of 396 issues traded, 310 declined, 50 advanced, and 36 remained unchanged on the DSE trading floor.
Newly-listed Asiatic Laboratories dominated the turnover chart, with shares worth Tk 398 million changing hands, followed by Lovello ice-cream, Golden Son, Orion Infusion, and Best Holdings.
BD Thai Food was the highest gainer, posting a 9.78 per cent increase, while Olympic Accessories was the worst loser, having shed 9.10 per cent.
The Chittagong Stock Exchange also ended lower, with its All Shares Price Index (CASPI) shedding 35 points to 16,154 and the Selective Categories Index (CSCX) losing 18 points to 9,719.

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