Stocks witnessed a yet another major fall on Monday, with the benchmark index of the Dhaka bourse dipping to three-week low, as jittery investors went on a late-hour selling spree.
Although the market showed a positive trend initially, the indices failed to keep the momentum after the mid-session due to heavy sale pressure on small-cap stocks, particularly of life insurance, general insurance and jute companies.
DSEX, the prime index of the Dhaka Stock Exchange, finally slid 30.98 points to settle at 6,310, the lowest in three weeks since May 24. The DSEX lost 42 points in the past two days.
Market operators said investors preferred to remain cautious, keeping an eye on the draft income tax bill 2023 that had been placed in parliament on June 8, before making any fresh investment in the market.
"Despite the market being afloat until mid-session, the subsequent dominant sell pressure from cautious investors led the market to dip into the red further," said EBL Securities.
The life insurance sector continued to bleed, eroding 4 per cent further on Monday following the news that the insurance regulator appointed observers to four life insurers for their failure to protect the interests of policyholders.
The Insurance Development and Regulatory Authority received complaints over the years from policyholders. Non-payment of claims on time is causing extreme dissatisfaction among customers and tarnishing the image of the insurance industry.
Three out of top 10 losers were life insurers, with Meghna Life Insurance suffering the most, losing 9.50 per cent, followed by Rupali Life Insurance and Pragati Life Insurance.
Top negative index contributors were Delta Life Insurance, Unique Hotel, Meghna Life Insurance and Sea Pearl Beach Resorts as they jointly accounted for 8 points fall of the DSEX.
Investors are suffering from a confidence crisis as there is no clear direction for the stock market in the proposed budget, said International Leasing Securities.
Political and economic uncertainties looming ahead of the national election also intensified the decline of the indices, it added.
Inflation hit a fresh decade-high at 9.94 per cent in May while some investors preferred to book profits, anticipating a tough time ahead.
The market turnover fell below Tk 10 billion-mark once again and the total turnover amounted to Tk 9.81 billion, 5 per cent lower over the previous day.
The life insurance sector, however, dominated the market turnover list, capturing 26 per cent of the day's total turnover.
The DS30 Index, which consists of blue-chip companies, also dropped 5.58 points to 2,185 and the DSES Index, which represents Shariah-based companies, plunged 5.58 points to 1372.
A majority of the stocks saw price erosion as 143 issues closed lower, 32 higher and 181 remained unchanged on the DSE floor.
Mid-cap stocks dominated the turnover list with Meghna Life Insurance becoming the most-traded stock having shares worth Tk 503 million changing hands, followed by Sea Pearl Beach Resorts, Rupali Life Insurance, Intraco Refueling Station, and Navana Pharma.
The Chittagong Stock Exchange (CSE) also ended lower for the second day with the CSE All Share Price Index (CASPI) losing 92 points to settle at 18,650 and its Selective Categories Index (CSCX) shedding 55 points to close at 11,155.
The port city's bourse traded 12.93 million shares and mutual fund units with a turnover value of Tk 399 million.
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