Stocks suffered another blow on Sunday, as daily turnover on the Dhaka bourse plunged to a five-month low amid growing tension that kept investors reluctant to put fresh bets.
The day's turnover, a crucial indicator of the market, fell to Tk 3.23 billion on the premier bourse, 36 per cent down from the previous day. It was the lowest single-day turnover since January 3 this year when transactions entailed Tk 2.92 billion.
Market experts attributed the market's free fall to numerous factors, including the increased policy rate and yields of Treasury securities as well as possible capital gain tax and rumours that corporate tax rate will go up for listed companies.
The latest regulatory efforts failed to stem the market plunge as investors, who have already lost confidence in the market, feel shaken by the recent free fall of the index.
To boost liquidity flow into the market, the stock market regulator last week raised the free limit facility for ICB Securities, from Tk 100 million to Tk 500 million.
The recent bearish spell continued for nine trading days, with persistent price erosions of a majority of the securities.
Substantial price erosion of blue chip stocks dragged the Dhaka Stock Exchanges' (DSE) benchmark index down by more than 61 points or 1.15 per cent to 5,250, a fresh 37-month-low since April 2021.
Large-cap stocks -- BAT Bangladesh, Renata, Beximco Pharma, BRAC Bank and Pubali Bank -- contributed highest to the Sunday's market plunge. They jointly accounted for one-third index fall.
The blue-chip index DS30, a group of 30 prominent companies, lost more than 19 points to 1,888 while the DSES index, which represents Shariah-based companies, shed 13 points to 1,146.
The key index shed 446 points in the nine trading days while the index lost more than 1,085 points or 17 per cent since the removal of floor prices in January this year. At the same time, the market value shed Tk 1.41 trillion.
"Investors shy away from taking positions in equities while losses continue to mount on their portfolios," said EBL Securities.
"Nothing is in favour of the capital market right now," said a leading broker, adding that the country's economy is now enduring some stresses, so its impact is reflected in the stock market.
All sectors faced selling pressure, leading to price erosion of more than 84 per cent stocks. Out of the 382 issues traded, 332 declined, 31 advanced and 29 remained unchanged.
The life insurance sector saw the highest loss of 3.3 per cent, followed by jute, paper, non-bank financial institutions, engineering, and food sector sectors.
Orion Pharma became the most-traded stocks with shares worth Tk 209 million changing hands, followed by BAT Bangladesh, Lovello Ice-Cream, and Unilever Consumer Care.
Samorita Hospital was the top gainer, rising 6.55 per cent, while National Life Insurance was the worst loser, enduring 8.79 percent correction, following its corporate declaration.
The Chittagong Stock Exchange also ended sharply lower, with its All Shares Price Index (CASPI) shedding 170 points to 15,233 and the Selective Categories Index (CSCX) losing 102 points to 9,163.
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