Stocks sink to 35-month low

Stocks witnessed yet another setback on Tuesday, with the Dhaka bourse's prime index tumbling to a 35-month low, as investors continued to dump their holdings to prevent further losses.
DSEX, the prime index of Dhaka Stock Exchange (DSE), slumped 52.74 points or 1.11 per cent to settle at 4,708-the lowest level since November 17, 2016.
It has lost a cumulative 240 points in the past one month while it has eroded 1,242 points since January 24, when the index peaked at 5,950.
Market capitalisation has also shed Tk 638 billion in the past nine months since January 24, DSE data shows.
To protest against the continuous fall of indices, a section of aggrieved investors staged a demonstration in front of DSE building the same day.
They chanted slogans demanding removal of M Khairul Hossain for what they said his failure to restore normalcy in the market despite a series of market supportive measures.
Mr Hossain is the chief of the capital market watchdog, Bangladesh Securities Exchange Commission (BSEC).
The demonstrators alleged that the securities regulator has failed to curb market manipulation and punish the gamblers, so small investors lost their money.
The rot began when the news emerged that the fiscal year (FY) 2019-2020 budget was passed in parliament on June 30 without any significant incentive for the stocks.
The stock market has hardly rebounded since then.
The government's supportive measures like redefining banks' capital market exposure and amending public issues rules also failed to boost the fund flow.
Stocks are on free fall and nothing is helping investors retain the value of their shares, said an analyst.
This prolonged bearish trend has frustrated general investors.
"Since the beginning of the year," he said, "indices are in downtrend, with some periodic upward movements, which failed to sustain amid confidence crisis."
He said investors were selling off shares fearing a further fall as the investors found no immediate solution to the current depressed market situation.
A leading broker said the investors have been suffering a crisis of confidence for long and the recent fall of the index mounted the crisis among them.
This lack of trust came from banks' liquidity crunch, tussle between Grameenphone and telecoms regulator, and massive share sales by foreign investors, he noted.
The investors are not confident enough to inject fresh funds into stocks amid a dismal market outlook, said Bangladesh Merchant Bankers Association secretary general Khairul Bashar Abu Taher Mohammed.
New investors are staying off the market, selling shares and not returning either as the market lacks direction, he observed.
The institutional investors had also maintained a cautious stance due to the ongoing liquidity crunch, Mr Bashar, CEO of MTB Capital Ltd, told the FE.
The daily trade turnover on the prime bourse also dipped to Tk 2.88 billion as most investors were reluctant to make fresh investment in stocks amid this current trend.
Turnover came down to Tk 2.88 billion, which was 18 per cent lower than the previous session's turnover of Tk 3.50 billion.
Losers outnumbered gainers, as 292 out of 352 issues traded closed lower, 30 ended higher and 30 remained unchanged on the DSE floor.
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