Stock market sees off a tumultuous year

The Dhaka Stock Exchange (DSE) passed a volatile year in 2013 despite a positive ending of the broad share price index for the first time in last three years amid mounting political tensions.
Analysts said a disappointing scenario might continue into 2014 because of the poor macroeconomic condition and the heightened political tensions.
The market saw a bull-and-bear game of domination throughout the first half of the year while the second half saw the market hovering around the same points on the price index trying to find a direction.
The DSE main index DSEX started the year at 4,090.47 points and closed at 4,266.55 Monday, the last trading day of 2013, gaining 4.30 per cent, after weak performance in the last three consecutive years.
It gave investors some solace as they became hopeful of a comeback in 2014.
On the other hand, the DS30 index of blue chip companies, formerly DSE 20 index, remained flat in the negative zone. It slipped by 0.46 per cent in the year.
"Positive export data in spite of political unrest helped the market close on a positive note, though the DSEX did not get the expected rhythm," said an analyst.
"However, many investors are still sticking to their 'wait-and-see' policy and waiting for a clear direction. A gloomy political outlook was a major setback for the market in recent weeks," he said.
All other market-related indicators suffered the jolts modestly during the period. The average daily trade value dropped by 4.76 per cent to Tk 4.0 billion against last year's average of Tk 4.20 billion.
The total market capitalisation of the DSE went up by 10.16 per cent while the ratio of market capitalisation to GDP was 25.51 in 2013 against 26.27 in 2012. The market weighted average ratio for the DSE stood at 15.07 against 12.07.
On January 27 last the prime bourse launched the two new price indices-DSE Broad Index (DSEX) and the DSE-30 Index (DS30)-by replacing the DSE General Index (DGEN) and the DSE-20 respectively for better calculation of the market activities.
The base points of the DSEX and the DSE30 were 4,055.90 and 1.460.30 respectively.
The market was volatile throughout the first half (January-June) of the year and the key index of the DSE came down to 3,438.89 points on April 30 with the investors seized by panic. It hit the high of 4,439.59 points on November 20 last.
Demutualisation of both the stock exchanges of the country was a much-talked-about issue in 2013. The Bangladesh Securities and Exchange Commission (BSEC) approved the demutualisation schemes on November 21, paving the way for separating the bourses' management from ownership and ensuring transparency and accountability.
"It's a milestone in the history of Bangladesh's stock market," the BSEC said after giving approval to the schemes prepared by the Dhaka and Chittagong stock exchanges, analysts said. "It would ensure transparency and accountability in the market as it separates management from ownership."
However, former BSEC chairman Faruq Ahmad Siddiqi said the demutualisation would bring the expected results, if the existing stock exchange members mean it and act accordingly. "Otherwise, it will not be effective and it will not bring any good results," he added.
Fifteen new securities were listed with the DSE in 2013. They raised Tk 10.56 billion through initial public offerings (IPO).
"Performance of the primary market was relatively good, as newly-listed companies' prices jumped many times on their debut trading day, which also encouraged investors to get at least one IPO lot to book short-term profit," said Mr Akhter Hossain Sannamat, managing director of the Union  Capital of Bangladesh and also vice president of Bangladesh Merchant Bankers Association (BMBA).
Only six listed companies raised over Tk 1.80 billion through rights offers from the stock market in 2013.
Mutual funds that entered the market in 2010-when they were at their peak-had been watching the market movements from the sidelines throughout 2013 despite taking some opportunities.
The Chittagong Stock Exchange (CSE), the second bourse of the country, introduced the T+2 Settlement Cycle from November 3 last. The CSE authorities consider the initiative another milestone for development of the capital market in Bangladesh.
However, the premier bourse DSE launched on February 21 the Bangla version of its website in a bid to provide investors with information in their mother language for better understanding of it and providing information on listed companies in an easier way.
The government's initiative of compensating the retail investors who lost money during the market downswings in 2011, gave the investors some confidence in the last half of the year.
The first instalment of Tk 3.0 billion out of the Tk 9.0 billion refinance scheme for the affected retail investors was released to the Investment Corporation of Bangladesh (ICB) on August 26 last for disbursement through merchant banks and stock brokers.
But the merchant banks and stock brokers drew poor response from the retail investors because of tough conditions attached to it, sources said.
"The market is still stagnant as investors' confidence is yet to be restored despite the broad index ending the year on a positive note," said AB Mirza Azizul Islam, former adviser to caretaker government.
"There is no sign of recovery in 2014 as the macroeconomic scenario is not promising, GDP growth has been forecast to be lower and the capital machinery import is getting down continuously. These are not good for the economy as well as for the market," Mr Islam said.
The government's initiative for compensating the retail investors was yet to be fulfilled and actions against market manipulators were yet to be taken, said Mr Islam, also former chairman of the BSEC.
Several spells of countrywide blockades in the last two months already took a heavy toll on the country's overall trade and commerce, he said adding: "The market stability depends on political stability in 2014."
Mr Akhter Sannamat said: "The market passed a positive year when it comes to the index, though we did not get the expected result."
"Although the market managed to close positive, the political uncertainty still drives investors to trade cautiously," he said.
The last half of the year started with much optimism, as the investors were upbeat about a peaceful solution to the ongoing political stalemate.
"The overall market is yet to be stable amid growing political tensions, as business almost halted amid frequent shutdowns, blockades and political violence in the last half of the year," he said.
The current economic situation might leave negative impacts on the investors' psychology, as they already became frustrated over the prevailing political standoff, he said. The market stability would largely depend on political stability, he added.