Stocks continued their downward spiral on Tuesday for the eighth session in a row as panic-driven selloffs dominated the market.
Many stocks came down to the forced-selling level from the leveraged accounts, which aggravated the market's decline, said a merchant banker, requesting not to be named.
The market has been witnessing a bearish trend since the withdrawal of floor price from the largest and second largest stocks - Grameenphone and British American Tobacco (BAT) Bangladesh -- while rising interest rate has encouraged a diversion of funds to the money market.
The removal of floor from another large-cap stock -- Robi Axiata - on Tuesday worsened the market's condition.
As per a directive issued on February 6, the Bangladesh Securities and Exchange Commission (BSEC) withdrew the price restriction for the second largest telecom operator, Robi, which was in place for more than 18 months.
Right from the start of the trading session, Robi saw a significant sell pressure. By the time the session ended, Robi, the fifth most valued stock, lost Tk 3 per share to close at Tk 27 per share.
Robi's price erosion alone accounted for a loss of 7.40 points of the benchmark index of the Dhaka bourse. The index lost 84 points in total.
"After the removal of floor, it's usual that the stock will face some correction. Nothing to be worried about," said Saiful Islam, president of the DSE Brokers Association of Bangladesh.
Investors, who had been into the floor price trap with Robi shares for a long time, wanted to get rid of their holdings.
However, Mr Islam said investors would be interested in betting money on the stock once they considered the price-level rational.
On Tuesday, some 519 trades were executed with 0.76 million Robi shares changing hands, leading to a turnover of Tk 20.54 million.
Meanwhile, Robi has reported a record profit of Tk 3.21 billion for 2023, supported by a robust revenue growth on inclusion of a record number of new subscribers.
The telecom operator registered a 16 per cent growth in revenue to Tk 99.42 billion in 2023.
Based on the profit growth, it declared a 10 per cent cash dividend for 2023, the highest since the company's listing in the stock market in 2020.
After the corporate disclosure on February 18, Robi stock took off from the floor to Tk 31.20 per share. It failed to sustain the price increase and fell to the floor at Tk 30 per share the next day.
Since the floor price removal, GP and BAT have continued to fall on the bourses.
BAT plunged 20 per cent while GP tumbled 15 per cent since early March.
Meanwhile, investors are wary of the prospects of the market while discussions are on about who will become the next chairman of the Bangladesh Securities and Exchange Commission. The present chairman's tenure will expire in mid-May this year.
Tuesday's market scenario
DSEX, the prime index of the Dhaka Stock Exchange, went down further by 84 points or 1.43 per cent to settle at 5,814, the lowest in three years.
Top negative index contributors were Beacon Pharma, Robi, BAT Bangladesh, Prime Bank and Renata. They jointly accounted for 29 points decline of the index.
The DSEX lost more than 352 points in the past eight sessions.
"Panic-driven sell pressure continued to dominate the market amid subdued market sentiment and rising tensions over the market outlook," said EBL Securities.
Anxious investors continued their selling spree to protect their funds from the ailing market and remain on the sidelines until there is any clear indication regarding the market momentum, said the stockbroker.
Large-cap sectors posted negative performance. Telecommunication saw the highest loss of 3.46 per cent, followed by non-bank financial institutions, food, pharma, power, engineering and banking sectors.
Two other indices also ended lower. The DS30 index, which consists of blue-chip companies, plunged more than 22 points to 2,020 while the DSES index, which represents Shariah-based companies, lost nearly 18 points to 1,268.
The turnover was Tk 4.66 billion, a 4.4 per cent down from the day before.
More than 80 per cent traded issues saw correction as out of 396 issues traded, 319 closed lower, 41 higher and 36 remained unchanged on the DSE trading floor.
The newly listed Asiatic Laboratories became the most-traded shares, with shares worth Tk 406 million changing hands, followed by Fu-Wang Ceramic, Golden Son, Central Pharma and Renata.
Central Pharma was the day's top gainer, posting 7.72 per cent rise, while Robi the worst loser, shedding 10 per cent.
The Chittagong Stock Exchange also saw a sharp decline with its All Shares Price Index (CASPI) losing 275 points to 16,654 and the Selective Categories Index (CSCX) shedding 165 points to 10,000.
Investors' protest
Angry over the persistent market fall, a group of investors staged a demonstration in front of the DSE Motijheel building. They blamed the downward spiral on market syndicates, which, according to them, fleeced them by manipulating share prices.
Retail investors, under the banner of Bangladesh Capital Market Investors Association (BCMIA), demanded immediate actions to stop the free fall of the market.
Investors urged the stock market regulator to take prompt actions against manipulations and wrongdoings and warned of a tougher movement otherwise.
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