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DSE core index sheds 114 points in three days

FE REPORT | June 22, 2022 00:00:00

Stocks continued bleeding for the third straight day on Tuesday as cautious investors offloaded shares on major sector issues amid growing economic worries.

The market opened on a negative note and the downturn continued until the end of the session, ultimately ending over 45 points lower.

DSEX, the core index of the Dhaka Stock Exchange, slid 45.72 points or 0.72 per cent to settle at 6,311, lowest in the four weeks since May 26. DSEX shed over 114 points in the past three consecutive days.

Turnover, the crucial indicator of the market, dropped further to Tk 7.25 billion, which was 12 per cent lower than the previous day's tally of Tk 8.22 billion.

Block trade accounted for 23 per cent to the total turnover where stocks like National Bank (Tk 672 million), Orion Pharma (235 million), Premier Bank (Tk 226 million) and Renata (Tk 174 million) dominated the block trade board.

Market analysts said investors kept their sell-off on major sector stocks amid growing tension over the country's macroeconomic situation.

The anxiety of economic instability and uncertainties of the coming days created apprehensions among stock investors, said a merchant banker, seeking anonymity.

Already the inflation rate is rising fast. Food prices and oil prices have been impacted by the Ukraine-Russia war, he said.

The media reported that the inflation jumped to eight-year high at 7.42 per cent in May as the prices of all the essentials continued soaring.

Floods in north and northeast regions worsened the overall market sentiment.

"Investors might favor sideline strategies to observe market momentum in the backdrop of rising inflation and depreciating exchange rates," said a leading broker.

The investors are more conservative now because of bleak local and global economic outlook, deteriorating exchange rate, inflationary pressure along with the existing threat to corporate profitability, he said.

International Leasing Securities said the rising inflation is reducing the real income of the investors and the increasing dollar value is decreasing the value of foreign investors' portfolio.

"The investors preferred to hold cash on hand instead of further erosion of portfolio value and decreased their participation in the market," the stockbroker said.

Stocks are in doldrums as a result of investors' furious attempts to dodge the current bearish trend due to their unease with the country's adverse macroeconomic situation, according to EBL Securities.

Foreign investors' sell-off against the backdrop of the declining BDT raised investor fear, and the possibility of monetary tightening by the central bank to contain increasing inflation might further erode investor confidence, said the stockbroker.

The investor also feared the impact of the fresh wave of Covid-19 virus due to the rising trend of infections.

Two other indices also ended lower. The DSE 30 Index, comprising blue chips, lost 19.15 points to finish at 2,295 and the DSE Shariah Index (DSES) shed 9.11 points close at 1,378.

All sectors faced price erosion. Among the major sectors, financial institutions posted the highest loss of 0.90 per cent, followed by banking with 0.50 per cent, pharma 0.50 per cent, engineering 0.40 per cent, power 0.30 per cent and telecom 0.30 per cent.

Losers took a strong lead over the gainers as 382 issues traded, 282 declined, 57 advanced and 43 issues remained unchanged on the DSE trading floor.

Beximco was the most-traded stocks with shares worth Tk 384 million changing hands, followed by Anwar Galvanizing (Tk 279 million), Fu-Wang Food (Tk 237 million), JMI Hospital Requisite (Tk 191 million) and Shinepukur Ceramics (Tk 159 million).

Junk stock Imam Button was the top gainer, posting a 10 per cent gain while Tallu Spinning Mills was the day's worst loser, losing 2.0 per cent.

The Chittagong Stock Exchange (CSE) also kept losing with the CSE All Share Price Index - CASPI -slumping 137 points to settle at 18,591 and the Selective Categories Index - CSCX -shed 83 points to close at 11,145.

Of the issues traded, 211 declined, 34 advanced and 30 issues remained unchanged on the CSE.

The port city's bourse traded 22.44 million shares and mutual fund units with turnover value worth over Tk 562 million.

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