The equity benchmark index ended the first trading week in the new year with losses, as investors grappled with new worries about potential economic setbacks due to proposed VAT hikes, which finally came into effect on the last day of the week.
Also, prolonged absence of positive cues made investors hesitant to make new investments.
Amid this situation, Finance Adviser Salehuddin Ahmed held a meeting with stakeholders this week, but it failed to boost confidence in the market, as no concrete commitments were made to restore the market's weakening momentum.
The National Board of Revenue (NBR) on Thursday hiked value-added tax (VAT) and supplementary duty (SD) on nearly 100 goods and services despite widespread concern that the increased taxes will stoke inflation further.
Investors remained largely reluctant to make new investments in stocks due to the bleak market outlook amid the confidence crisis, said a leading stockbroker.
Consequently, the market witnessed a dominant sell pressure and three trading days ended lower while two sessions managed to close positive.
DSEX, the key index of the Dhaka Stock Exchange (DSE), finally settled the week 5 points or 0.10 per cent lower at 5,194. It gained 15 points in the week before.
The blue-chip DS30 index, a group of 30 prominent companies, also fell nearly 7 points to 1,924. However, the DSES index, which represents Shariah-based companies, rose almost 7 points to close at 1,162.
In its weekly market review, EBL Securities said the benchmark index failed to match the short-lived recovery of the previous week as investors' sentiment remained subdued.
The market witnessed a lackluster trading throughout the week, as market sentiment is yet to rebound from its prolonged depressed state in absence of any strong positive catalyst to revive investor confidence, said the stockbroker.
"The main challenges in the capital market are the lack of good governance, efficiency, accountability, and transparency," said Mominul Islam, chairman of the prime bourse, at a press briefing on Thursday.
The new board of directors of the prime bourse has pledged to address these problems and provide periodic updates on their progress, he said.
This week, the blue-chip stocks having significant influence on the DSE broad index experienced correction. Price erosion of selective stocks such as Islami Bank, Al-arafah Islami bank, BAT Bangladesh, BRAC bank and LafargeHolcim jointly accounted for a 22-point fall in the key index.
Islami Bank, which plunged 3.54 per cent this week, contributed a 12.9-point fall to the key index alone. The bank's stock closed at Tk 49.10 on Thursday.
Al-Arafah Islami Bank, another blue chip stock, also accounted for 3.10 point fall of the prime index while BAT Bangladesh and Brac Bank accounted for 3.1 points and 2.5 points respectively to the key index.
Turnover, a crucial indicator of the market, stood at Tk 17.33 billion this week, up from Tk 13.92 billion the previous week, as this week saw five trading days instead of previous week's four.
Consequently, the average daily turnover dropped by 0.44 per cent to Tk 3.46 billion, down from Tk 3.48 billion the previous week.
Investors were mostly active in the banking sector, which accounted for 18 per cent of the week's total turnover, followed by pharma (14 per cent) and engineering sector (9 per cent).
Most of the traded stocks saw price erosion, as out of 398 issues traded, 208 closed lower and 140 higher while 50 remained unchanged.
The large-cap sectors saw negative performance. The non-bank financial institution was the highest loser, shedding 2.04 per cent, followed by banking sector with 0.75 per cent, food 0.74 per cent, engineering 0.62 per cent and power 0.25 per cent.
On the other hand, the telecom sector gained 2.20 per cent as the sector leader Grameenphone alone gained 2.5 per cent this week.
Fine Foods was the most-traded stock with shares worth Tk 1.11 billion changing hands, followed by Midland Bank, Robi Axiata, Orion Infusion and Khan Brothers PP Woven.
The Chittagong Stock Exchange (CSE) also ended lower, with CSE All Share Price Index (CASPI) losing 92 points to settle at 14,460 and its Selective Categories Index (CSCX) shedding 62 points to 8,797.
The port-city bourse traded 12.17 million shares and mutual fund units, with a turnover value of Tk 404 million.
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