DGEN hits 2-year low, dips below 5,000 points-mark

FE Report Dhaka stocks again witnessed sharp decline Monday and DGEN came down to nearly two-year low to dive below 5,000 points level, as investors sold off shares out of panic fearing further debacle in the stock market. The DGEN nosedived for the second consecutive day after Eid closure. The fall started on the day within minutes of opening. Within first hour of trading most of the shares with relatively poor fundamental hit the circuit breaker and became buyer-less, as the regulatory and monetary initiatives have apparently failed to revive investors' confidence and bring back stability in the stock market. The market opened with a negative sentiment and lost more than 100 points within five minutes. The downtrend continued and at about 12 noon the DGEN lost 230 points and came down to 4803 points. However, it recovered some points and finally ended the day 164 points lower. The benchmark General Index of Dhaka Stock Exchange (DGEN), the yardstick of the market, plunged 164.71 points or 3.26 per cent to close at 4,877.52 which was nearly two-year low since January 19, 2010. On January 19, 2010, the DGEN was 4,856.73. The broader DSE All Shares Price Index (DSI) slipped 136.53 points or 3.23 per cent to close at 4,078.87. The DSE-20 blue-chip index also went down by 70.43 points or 1.85 per cent to close at 3,722.61. "The market lost almost 150 points during the first hour of trading. The velocity of the sell-off; suggested strong possibility of "forced sale" of shares in margin loan account," commented a market insider. "The investors are feeling more panicked and frustrated following the continuous share prices fall despite the government and market regulator have taken various positive measures to stablise the market," he said. Total turnover value, however, improved slightly to Tk 3.21 billion in value terms, against Tk 2.06 billion in the previous session though average daily turnover value of the year stands at Tk 7.10 billion. "Trade value crossed the Tk 3.0 billion mark due to a culmination of aggressive selling during early hours of trade and some aggressive dip buying towards the latter part of the session," a stock broker said. Almost all share prices traded on the day declined. Out of 252 issues traded, only 15 advanced, 235 declined and two remained unchanged. Overall turnover, trade volume and number of trades increased significantly reflecting fierce selling intent by the investors. A total of 51.69 million shares changed hands on the day against 31.06 million in the previous session. The trade deals also increased to 107,849 against Sunday's 70,847. Total market capitalisation of the DSE, however, declined to Tk 2,464.70 billion against Tk 2,528.80 billion in the previous session. All sectors ended in the red although banking and telecom sectors outperformed the market by more than one per cent. Among the major sectors---banking sector lost 2.05 per cent, whereas NBFIs, telecommunications, pharmaceuticals and fuel and power sectors declined by 4.72 per cent, 2.20 per cent, 3.69 per cent and 2.97 per cent respectively. Beximco Limited topped the turnover list with shares worth Tk 162.50 million changed hands. The other turnover leaders were Grameenphone, SIBL, Titas Gas, National Bank, UCBL, Mercantile Bank, Summit Power, MI Cement and Beximco Pharma. MBL First Mutual Fund was the day's highest gainer posting a rise of 4.81 per cent. It was followed by Standard Insurance, EBL NRB Mutual Fund, LR Global Mutual Fund, Eastern Bank, ACI Zero Coupon Bond, DESCO, National Life Insurance and Eastern Cables. The day's worst lowers included Quasem Drycells, Dulamia Cotton, Malek Spinning, City General Insurance, Navana CNG, BD Welding, Asia Insurance, Metro Spinning, Samata Leather and Meghna Condensed Milk.