Jittery investors take to streets as stock erosion continues
Tuesday, 16 March 2010
FE Report
Dhaka stocks Monday shed 37 points after recovering from the steepest fall ever-over 152 points-in the first 35 minutes of the day's trading. The biggest single-day fall was 137 points recorded in 2001.
The market witnessed ups and downs throughout the day amidst street protests by a small group of 'investors' and emergency meetings between top leaders of the Dhaka Stock Exchange and high officials of the Securities and Exchange Commission (SEC).
The market recovered halfway through the trading session on the back of strong speculation that the securities regulator would take some ' positive' decisions. However, there was, virtually, no improvement in daily turnover situation with the value of transactions remaining around Tk 6.0 billion.
At the end of the day, the DSE general index, DGEN, closed at 5338.13 with a fall of 36.93 points or 0.68 per cent.
Prices of nearly 99 per cent of the 239 traded issues declined during the initial 35 minutes of trading. However, finally, 59 stocks finished positive, 177 ended negative and three remained unchanged.
The steepest decline caught the investors of both DSE and Chittagong Stock Exchange (CSE) by surprise. Before their watchful eyes, most issues declined in rapid pace.
Some agitated investors came out of the DSE building and took to the street, blocking traffic movement for a while. They chanted slogans against the regulator and demanded increase in ratios of margin loan provided by merchant bankers and brokers.
Demonstrators submitted a memorandum to the CSE authorities demanding an end to frequent intervention by the regulator, imposition income tax on certain amount of profit generated from share trading and compulsory submission of TIN (Tax Identification Number) in opening beneficiary owner (BO)'s account.
"Frequent intervention by the regulatory bodies was responsible for the downfall of the market," said Rakibur Rahman, DSE president.
"I have already talked with all concerned. All are positive for brining stability in the market," he said.
Rakib said, "Investment by institutional investors, who are major market players, dropped drastically in the last few days due to Bangladesh Bank's warning about banks over-exposure to stock market."
"The central bank should give time to banks to reduce their exposure to a minimum level so that the market is not affected," he added.
Rakib appealed to the investors not to get panicky and said, " Please have patience, you will be rewarded at one time."
All sectors, except the non-banking financial institutions (NBFIs) that gained 0.38 per cent, went down.
The telecommunication sector continued to lose as Grameenphone edged 1.16 per cent lower to Tk 323.
The banking sector declined 0.74 per cent with Prime Bank losing highest 1.51 per cent.
Pharmaceuticals sector lost 0.99 per cent, mutual funds 0.90 per cent, energy 0.39 per cent, cement 0.39 per cent, tannery 0.64 per cent, general insurers 1.92 per cent and life insurer 1.03 per cent.
Beximco Limited was the top turnover leader with shares worth Tk 747.86 million changing hands.
Bextex, Grameenphone, Lanka Bangla Finance, DESCO, Summit Power, Navana CNG, AB Bank, BATBC and Square Pharma followed it.
In another development, SEC in a statement posted in DSE website requested all personnel and other persons concerned including employees of the institutions affiliated with stock exchange and market intermediaries to abstain from giving any opinion and comments which may create confusion among the investors for the growing capital market and for the long-term and greater interest of Investors.
Dhaka stocks Monday shed 37 points after recovering from the steepest fall ever-over 152 points-in the first 35 minutes of the day's trading. The biggest single-day fall was 137 points recorded in 2001.
The market witnessed ups and downs throughout the day amidst street protests by a small group of 'investors' and emergency meetings between top leaders of the Dhaka Stock Exchange and high officials of the Securities and Exchange Commission (SEC).
The market recovered halfway through the trading session on the back of strong speculation that the securities regulator would take some ' positive' decisions. However, there was, virtually, no improvement in daily turnover situation with the value of transactions remaining around Tk 6.0 billion.
At the end of the day, the DSE general index, DGEN, closed at 5338.13 with a fall of 36.93 points or 0.68 per cent.
Prices of nearly 99 per cent of the 239 traded issues declined during the initial 35 minutes of trading. However, finally, 59 stocks finished positive, 177 ended negative and three remained unchanged.
The steepest decline caught the investors of both DSE and Chittagong Stock Exchange (CSE) by surprise. Before their watchful eyes, most issues declined in rapid pace.
Some agitated investors came out of the DSE building and took to the street, blocking traffic movement for a while. They chanted slogans against the regulator and demanded increase in ratios of margin loan provided by merchant bankers and brokers.
Demonstrators submitted a memorandum to the CSE authorities demanding an end to frequent intervention by the regulator, imposition income tax on certain amount of profit generated from share trading and compulsory submission of TIN (Tax Identification Number) in opening beneficiary owner (BO)'s account.
"Frequent intervention by the regulatory bodies was responsible for the downfall of the market," said Rakibur Rahman, DSE president.
"I have already talked with all concerned. All are positive for brining stability in the market," he said.
Rakib said, "Investment by institutional investors, who are major market players, dropped drastically in the last few days due to Bangladesh Bank's warning about banks over-exposure to stock market."
"The central bank should give time to banks to reduce their exposure to a minimum level so that the market is not affected," he added.
Rakib appealed to the investors not to get panicky and said, " Please have patience, you will be rewarded at one time."
All sectors, except the non-banking financial institutions (NBFIs) that gained 0.38 per cent, went down.
The telecommunication sector continued to lose as Grameenphone edged 1.16 per cent lower to Tk 323.
The banking sector declined 0.74 per cent with Prime Bank losing highest 1.51 per cent.
Pharmaceuticals sector lost 0.99 per cent, mutual funds 0.90 per cent, energy 0.39 per cent, cement 0.39 per cent, tannery 0.64 per cent, general insurers 1.92 per cent and life insurer 1.03 per cent.
Beximco Limited was the top turnover leader with shares worth Tk 747.86 million changing hands.
Bextex, Grameenphone, Lanka Bangla Finance, DESCO, Summit Power, Navana CNG, AB Bank, BATBC and Square Pharma followed it.
In another development, SEC in a statement posted in DSE website requested all personnel and other persons concerned including employees of the institutions affiliated with stock exchange and market intermediaries to abstain from giving any opinion and comments which may create confusion among the investors for the growing capital market and for the long-term and greater interest of Investors.