The prime index of Dhaka Stock Exchange (DSEX) slumped below 6,500 mark on Monday after six weeks amid persistent liquidity shortage and confidence crisis among investors.
Market insiders said the jittery investors went on heavy sell-off to avoid further erosion of their portfolios while pre-Eid sale pressure exacerbated the market situation.
The market witnessed a steep fall from the beginning of the session as investors, particularly the retail ones, went for panic sales, dropping below the 6,500-mark.
DSEX, the prime index of DSE, slid 72.49 points or 1.10 per cent to settle at 6,482, the lowest level in six weeks since March 8, this year.
DSEX eroded over 102 points in the past two consecutive days.
Two other indices also saw sharp decline. The DSE 30 Index, comprising blue chips, plunged 25.31 points to finish at 2,409 and the DSE Shariah Index (DSES) shed 13.54 points to close at 1,428.
The prolonged pessimism kept investors mostly inactive, bringing turnover, an important indicator, to Tk 3.90 billion, from Tk 3.94 billion in the previous day.
It was also the lowest single-day transaction in more than a year since April 5, 2021, when turnover totalled Tk 2.37 billion.
Turnover plunged as the liquidity shortage in the capital market has worsened further amid lack of confidence among investors, according to a stockbroker.
Banks and financial institutions have already been suffering from liquidity shortage for the last few weeks which dried up their investment, he said.
"The investors are in a very tough situation and panicked as they are witnessing continuous erosion of their portfolio," he said.
Now, some steps are needed on the part of the regulator to boost investors' confidence by easing liquidity flow in the market, he said.
Rabin, an investor, told the FE that he has been losing money for the last few weeks and is now facing forced sale from his broker as the prices of his stocks declined sharply.
Md. Moniruzzaman, managing director of IDLC Investments, said generally investors prefer to take fresh positions in an upward market for realising gains.
"Investors' scope of making fresh investments is reduced amid the continuous downward trend of the market. It's one of the reasons behind the poor turnover observed in the market," Mr. Moniruzzaman said.
He said the reduced limit of circuit breaker may be another reason behind poor market turnover observed recently.
"Some investors were stuck with heavy losses in their portfolios and could not get out of it. Now, the investors are waiting for regulatory steps to stop the free fall," said International Leasing Securities, in its regular market analysis.
According to EBL Securities, the liquidity crunch of the capital market might exacerbate further amid growing consumption in Ramadan and the upcoming spending spree centering Eid-ul-Fitr.
All sectors witnessed price erosion. Among major sectors, cement witnessed the highest loss of 1.80 per cent, followed by financial institutions with 1.50 per cent, power 1.20 per cent, engineering 1.0 per cent, food 0.90 per cent, telecom 0.90 per cent and banking 0.70 per cent.
Some 70 companies had no buyers during the trading session on Monday.
Prices of more than 91 per cent traded issues declined, as out of 380 issues traded, 347 declined, 14 advanced and 19 issues remained unchanged on the DSE trading floor.
JMI Hospital Requisite Manufacturing topped the turnover list with shares worth Tk 736 million changing hands, followed by LafargeHolcim, Kattali Textile, Square Pharma and Beximco.
JMI Hospital Requisite Manufacturing was also the day's top gainer, posting a 7.96 per cent gain while Central Insurance was the worst loser, losing 2.0 per cent.
The Chittagong Stock Exchange (CSE) also closed sharply lower with the CSE All Share Price Index - CASPI -losing 172 points to settle at 19,130 and the Selective Categories Index - CSCX -shedding 103 points to close at 11,477.
Of the issues traded, 224 declined, 23 advanced and 19 issues remained unchanged on the CSE.
The port-city bourse traded 9.11 million shares and mutual fund units with turnover value worth over Tk 365 million.
© 2024 - All Rights with The Financial Express
