Stocks plummet on political fears

Stocks extended the losing streak for the third straight week to Thursday, as jittery investors continued to dump their holdings, fearing further erosion of their portfolios, with no sign of political or economic volatility slowing.
Furthermore, the latest policy rate hike by a 50 basis points amid a tightened monetary space fuelled the prevailing concerns among investors regarding the market outlook.
The central bank's latest steps make funds costlier, which would lead to a shift in money flow from the stock market to banks as many investors are likely to invest in fixed-income deposits rather than in the stock market, market analysts said.
The prevailing floor price has been discouraging investors from putting fresh bets on stocks for long while one issue after another erodes their confidence, said a leading stockbroker.
The central bank's higher policy rate will gradually slow down the money flow to the stock market, he added.
The market fell from the beginning of this trading week, as investors, particularly the retail ones, went for panic sales, hitting the key index to eight-month low on Monday.
Of the five trading days, the first three sessions suffered a fall while the last two managed to recover some losses amid country-wide hartal and blockade enforced by BNP and other opposition parties.
The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), finally settled 10.68 points lower at 6,223.03. The DSEX shed nearly 48 points in the past three straight weeks.
Top negative index contributors were Kohinoor Chemicals, Sea Pearl Beach Resorts, Prime Bank, BD Thai Aluminum and Fu-Wang Ceramic as they jointly contributed 10-point fall.
Two other indices also ended lower. The DS30 Index, which consists of blue-chip companies, shed nearly 2 points to 2,108 and the DSES index, which represents Shariah-based companies, lost 0.67 points to 1,353.
EBL Securities, in its weekly analysis, said stocks extended losses, owing to subdued confidence stemming from the prevailing macroeconomic and political concerns, further intensified by the central bank's latest policy rate hike.
However, some opportunistic investors sought bargain hunting opportunities in particular sector-specific and rumor-based stocks in anticipation of quick gains, taking advantage of the prolonged downbeat vibe in the market, said the stockbroker.
The participation of investors remained low and the total turnover of the week stood at Tk 19.08 billion, down from Tk 20.02 billion in the week before.
Accordingly, the average daily turnover stood at Tk 3.82 billion in the outgoing week, which was 5 per cent lower than the previous week's average of Tk 4 billion.
Majority of the traded stocks remained confined to the floor. Out of 377 issues traded, 222 remained unchanged, 92 witnessed price erosion, and 63 saw price surge on the DSE trading floor.
Most sectors saw price erosion, with general insurance witnessing the highest price erosion, losing more than 1.70 per cent, followed by travel & leisure, jute and textile sectors.
The engineering sector dominated the week's turnover chart, accounting for 18 per cent of the week's total turnover, followed by food and pharma.
Small-cap stocks dominated the turnover list as Khulna Printing & Packaging became the most-traded stocks, with shares worth Tk 875 million changing hands, followed by Central Pharma, Yeakin Polymer, Fu-Wang Food and Sea Pearl Beach Resorts.
GQ Ball Pen Industries was the week's top gainer, soaring 32.7 per cent while BD Thai Aluminum was the worst loser, shedding 22.9 per cent.
The Chittagong Stock Exchange (CSE) also extended the losing streak for the three weeks in a row with its All Share Price Index (CASPI) losing 18 points to settle at 18,479 and the Selective Categories Index (CSCX) falling 10 points to close at 11,051.
The port city's bourse traded 16.57 million shares and mutual fund units with a turnover volume of Tk 356 million.

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