The broad index of the Dhaka bourse experienced a loss of 122.64 points on Thursday, marking the biggest single-day fall in the last six months, following panic sales triggered by the countrywide lockdown called by the party of the ousted government.
The Dhaka Stock Exchange (DSE) opened the day's session on a negative note and continued the downtrend till closure, except for some brief recovery attempts that faded away quickly.
At the end of the session, the DSE broad index - DSEX - closed at 4,702.68 points, down 2.54 per cent from the previous session.
Before this, the DSEX witnessed another major single-day fall of 149 points on May 7 last year due to regional tension arising from a war conflict between India and Pakistan.
Market operators said that the ongoing political unrest and the new compliance requirements under the revised margin rules played a major role behind the recent erosions, especially Thursday's steep fall.
As per the revised margin rules, lenders are required to start portfolio adjustments through forced selling after a 50 per cent erosion of client equity.
Under the previous rules, lenders were required to execute forced selling only when 75 per cent of equity was eroded.
Asked about the development, S. M. Galibur Rahman, head of research and strategic planning at Shanta Securities, said the revised rules are good.
"But the initial phase of the lenders' compliance with the revised rules is leaving an impact as they are executing forced selling," he said.
In a falling market, the amount of forced selling increases to avoid higher adjustment requirements.
That's why the DSE's turnover value on Thursday rose compared to the previous session.
On the day, the premier bourse posted a turnover of Tk 3.83 billion, up 32 per cent from the previous session.
The erosion in large-cap companies on Thursday played a pivotal role in the day's steep fall because of their significant influence on the broad index.
Of the top 20 large-cap companies, 18 saw price erosion. Among them, Grameenphone, Robi Axiata, BRAC Bank, and British American Tobacco Bangladesh Company declined between 0.47 per cent and 4.25 per cent.
In fact, the impact of Thursday's 122-point loss is more significant as the country's equity market had already been on a downward trend since November 3, when the broad index closed at 5,019 points.
The following day, the DSEX dropped below the 5,000-point mark and continued its declining trend till Thursday, losing a total of 359 points or 7.15 per cent during the period.
Other factors contributing to the continuous decline include the merger of five Islamic banks and the liquidation of nine non-bank financial institutions (NBFIs), which are likely to yield nothing for general investors due to the companies' negative asset values.
Of 384 issues traded on Thursday, only 15 advanced, 352 declined, and the remaining 17 remained unchanged.
As a result, the DS30 index, comprising blue-chip stocks, also took a hit since 27 out of its 30 constituent stocks lost value.
The two blue-chip stocks that stayed in the green were Prime Bank and Walton Hi-Tech Industries, while the share price of Square Pharmaceuticals remained unchanged.
Surprisingly, Familytex (BD) - a company that has remained closed for a long time - was the number one gainer on Thursday on the DSE.
An inspection conducted by the DSE in October 2023 found that the company's head office was being used by another firm named Olila Glass Industries.
The stock price of this penny stock closed at Tk 1.03, up 6.06 per cent.
The day's other gainers included DESCO, Al-Arafah Islami Bank, Shahjibazar Power Company, Prime Bank, and Walton Hi-Tech Industries.
Miracle Industries was the worst loser, dropping 10 per cent, followed by Phoenix Finance and Investments, and Pragati Life Insurance.
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