Govt steps fail to prop up stock mkt, says MCCI

The capital market remained almost at the same dull state with no significant improvement or deterioration during the immediate-past fiscal year (FY15), despite several initiatives by the government to boost the market.

According to a review of Economic Situation in Bangladesh during April-June 2015 (Q4 of FY15) by the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), nationwide strikes and blockades for at least 70 days throughout the first quarter left a negative impact on the country's economic activities. Most of the companies, including the listed ones, struggled to do business, while the financial sector also suffered from low credit growth.

 On the backdrop of political uncertainty, sluggish credit growth and poor earnings declarations, the key index of Dhaka Stock Exchange, DSEX, slightly rose by 2.29 per cent to 4,583.10 points on 30 June 2015 from 4,480.52 points on 30 June 2014. The two other indices also ended slightly higher. Chittagong Stock Exchange (CSE) also ended higher with its Selective Categories Index, CSCX, gaining 109.37 points to close at 8,586.21 points.

Net foreign investment in the DSE declined to nearly half in the just concluded fiscal year (FY15) compared to the previous fiscal as investor enthusiasm waned amid political uncertainty.

Banks are the foreign investors' preferred sector, but non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecoms and IT also drew their attention. Investors include Morgan Stanley, JPMorgan, Goldman Sachs and BlackRock, among others. Also known as portfolio investment, foreign investment accounts for less than 2 per cent of DSE's total market capitalisation.