Dhaka stocks see biggest single-day fall in 6 months
Thursday, 4 February 2010
FE Report
Dhaka stocks Wednesday witnessed the biggest single-day fall in six months, triggered by securities regulators' latest move to cap on upswing of the market flooded with fresh funds.
The benchmark DSE General Index (DGEN) tumbled 103.73 points --- its biggest single-day drop since July 5 last year, when the index had lost 103 points --- to close at 5399.64, which is 1.88 per cent down from the previous day.
All the sectors except telecommunication and mutual funds ended low.
In the morning, the Securities and Exchange Commission (SEC) re-fixed the maximum rate of margin loan for merchant bankers at 1:1, down from 1:1.5.
It said merchant bankers should provide loan to their clients up to that ratio with effect from 7 February until further order.
The directive came two days after the commission retuned the margin loan criteria for brokerage houses at 1:1.5 ratio instead of 1:2 and set companies with a PE (price-earnings) ratio over 50 as marginable securities.
The Broader DSE All Shares Price Index (DSI) lost 86.57 points or 1.91 per cent to close at 4445.80, while DSE 20 comprising blue chips also shed 71.68 points or 2.29 per cent to 3049.46.
"The regulator's move has dragged the market down," said BRAC-EPL Research. Argus Research has also held the same view.
"There will be no use going for such moves as plenty of funds have poured in the market," said Yawer Sayeed, a leading analyst, welcoming the SEC's market cooling measure itself.
"The market is overheated and the price of inflation is clearly visible," he said adding that the only weapon to make the market stable is to increase the supply of shares.
The market fell across the board as out of 244 issues traded, 42 ended in the positive territory, 199 sustained losses and 2 remained unchanged.
Even after tightening the loan margin ratio, the daily turnover was still healthy as it stood at Tk 16.38 billion, down 3.2 per cent over the previous session's all time high of Tk 16.91 billion.
Grameenphone, the telecom giant, gained 0.17 per cent to close at Tk 287.30 and the mutual fund sector edged 2.16 per cent higher.
The banking sector went into a steep dive with all the banks trading in the red. The sector lost 3.67 per cent with Mercantile Bank fell the highest with 5.89 per cent and Premier Bank 5.66 per cent.
The non-banking financial institution sector dropped 1.45 per cent, pharmaceuticals 1.95 per cent, energy 2.50 per cent, cement 2.50 per cent, general insurers 2.06 per cent and life insurers 1.39 per cent..
All the subsidiaries of Beximco group and multinational companies went down.
Grameenphone topped the turnover list with shares worth Tk 1.18 billion traded, which is the highest ever transaction by a company in the DSE.
It was followed by Beximco, AB Bank, Lanka Bangla Finance, Prime Bank, Bextex, Southeast Bank, Navana CNG, Premier Bank and Shahjalal Bank.
Agni System, Gemini Sea Food, Aims First Mutual Fund, Grameen One Mutual Fund, Libra Infusion, 3rd ICB, ICB AMCL 2nd, Grameen Scheme Two Mutual Fund, ICB First NRB and EBL First Mutual Fund were the top gainers.
The major losers were Northern Insurance, Standard Ceramic, BD Autocars, BD Thai Aluminum, Bangladesh Shipping Corporation (BSC), GQ Ball Pen, Mercantile Bank, Summit Alliance Port Limited, Samata Leather and Premier Bank.
Dhaka stocks Wednesday witnessed the biggest single-day fall in six months, triggered by securities regulators' latest move to cap on upswing of the market flooded with fresh funds.
The benchmark DSE General Index (DGEN) tumbled 103.73 points --- its biggest single-day drop since July 5 last year, when the index had lost 103 points --- to close at 5399.64, which is 1.88 per cent down from the previous day.
All the sectors except telecommunication and mutual funds ended low.
In the morning, the Securities and Exchange Commission (SEC) re-fixed the maximum rate of margin loan for merchant bankers at 1:1, down from 1:1.5.
It said merchant bankers should provide loan to their clients up to that ratio with effect from 7 February until further order.
The directive came two days after the commission retuned the margin loan criteria for brokerage houses at 1:1.5 ratio instead of 1:2 and set companies with a PE (price-earnings) ratio over 50 as marginable securities.
The Broader DSE All Shares Price Index (DSI) lost 86.57 points or 1.91 per cent to close at 4445.80, while DSE 20 comprising blue chips also shed 71.68 points or 2.29 per cent to 3049.46.
"The regulator's move has dragged the market down," said BRAC-EPL Research. Argus Research has also held the same view.
"There will be no use going for such moves as plenty of funds have poured in the market," said Yawer Sayeed, a leading analyst, welcoming the SEC's market cooling measure itself.
"The market is overheated and the price of inflation is clearly visible," he said adding that the only weapon to make the market stable is to increase the supply of shares.
The market fell across the board as out of 244 issues traded, 42 ended in the positive territory, 199 sustained losses and 2 remained unchanged.
Even after tightening the loan margin ratio, the daily turnover was still healthy as it stood at Tk 16.38 billion, down 3.2 per cent over the previous session's all time high of Tk 16.91 billion.
Grameenphone, the telecom giant, gained 0.17 per cent to close at Tk 287.30 and the mutual fund sector edged 2.16 per cent higher.
The banking sector went into a steep dive with all the banks trading in the red. The sector lost 3.67 per cent with Mercantile Bank fell the highest with 5.89 per cent and Premier Bank 5.66 per cent.
The non-banking financial institution sector dropped 1.45 per cent, pharmaceuticals 1.95 per cent, energy 2.50 per cent, cement 2.50 per cent, general insurers 2.06 per cent and life insurers 1.39 per cent..
All the subsidiaries of Beximco group and multinational companies went down.
Grameenphone topped the turnover list with shares worth Tk 1.18 billion traded, which is the highest ever transaction by a company in the DSE.
It was followed by Beximco, AB Bank, Lanka Bangla Finance, Prime Bank, Bextex, Southeast Bank, Navana CNG, Premier Bank and Shahjalal Bank.
Agni System, Gemini Sea Food, Aims First Mutual Fund, Grameen One Mutual Fund, Libra Infusion, 3rd ICB, ICB AMCL 2nd, Grameen Scheme Two Mutual Fund, ICB First NRB and EBL First Mutual Fund were the top gainers.
The major losers were Northern Insurance, Standard Ceramic, BD Autocars, BD Thai Aluminum, Bangladesh Shipping Corporation (BSC), GQ Ball Pen, Mercantile Bank, Summit Alliance Port Limited, Samata Leather and Premier Bank.