Slowdown fears weigh on investors

Stocks tumbled in the week to Thursday, extending the losing streak for a third consecutive week, as jittery investors scrambled to exit the market by selling off their holdings amid growing worries about a potential economic downturn in the coming months.
All the five trading sessions of the week saw the benchmark equities index fall although the bargain hunters tried to buy lucrative stocks in the last two days.
Finally, the prime DSEX index of Dhaka Stock Exchange (DSE) ended the week 198 points or 3.13 per cent lower, settling at 6,126.52, the lowest in more than one year since June 29, 2021. DSEX shed more than 250 points in the past three consecutive weeks.
The market capitalisation of the DSE also slumped 2.50 per cent during the week to Tk 5,031 billion on Thursday.
Market operators said the ongoing global economic turmoil has severely impacted the Bangladesh economy, which was reflected in the stock market.
The market has been struggling for the past six months since the Russia-Ukraine war began, which was exacerbated by the government's measures to save energy as a safeguard against the global economic instability, said a merchant banker, seeking anonymity.
"Most of the investors were trying to exit the market by selling their shares as they anticipate more economic challenges ahead," he said.
He noted that the panic-stricken investors resorted to heavy sell-off after the government announced conservative policies on Monday to tackle the ongoing energy crisis.
Investors apprehended the market might fall further as media reports warned of potential risks to the country's economy, said an asset manager.
The investors are in a very tough situation as they are witnessing continuous erosion of their money while some are stuck with heavy losses and cannot get out of it, he said.
"The inflation rate is rising quickly which reduces the investors' buying capacity and the depreciation of the local currency against dollar prompted foreign investors' sales," he said.
"Pressure on foreign currency reserves, widening current-account deficit, rising inflation, and recently arising energy crisis problems are the key macroeconomic issues concerning the investors," said EBL Securities.
Two other indices of DSE also ended lower this week. The DS30 Index, comprising blue-chip companies, plunged 73.02 points to close at 2,200.83 and the DSES Index dropped 32.27 points to finish at 1,345.09.
The week's total turnover reached Tk 27.70 billion on the prime bourse as against Tk 19.62 billion in the previous week which saw only three trading days.
The daily turnover averaged out at Tk 5.54 billion, down 15.29 per cent over the previous week's average of Tk 6.54 billion.
"The investors abstained themselves from new investment in the market during the week that reflected in the average turnover," said International Leasing Securities.
All the sectors faced heavy selling pressure, leading to the share price erosion of nearly 86 per cent stocks. Out of 387 issues traded, 331 declined, 45 advanced and 11 issues remained unchanged on the DSE.
General insurance sector saw the highest correction, losing 6.60 per cent, followed by power (4.90 per cent), engineering (4.10 per cent), financial institutions (4.0 per cent), telecoms (1.80 per cent) and banking sector (1.20 per cent).
The problem-hit Bangladesh Industrial Finance Company (BIFC) was the week's top gainer, posting a 51.60 per cent rise, while Imam Button Industries was the worst loser, shedding 9.44 per cent.
The Chittagong Stock Exchange (CSE) also ended lower with the CSE All Share Price Index (CASPI) losing 627.02 points to settle at 17,968.38 and its Selective Categories Index (CSCX) losing 379.13 points to close the week at 10,764.12.
Of the issues traded, 305 declined, 39 advanced and five issues remained unchanged on the CSE trading floor.
The port-city bourse traded 31.38 million shares and mutual fund units with turnover value of Tk 784 million.

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