Stocks backed to the losing streak on Tuesday, after a single-day break, as regulatory interventions to revamp the ailing market virtually failed to restore investors' confidence.
Following the previous day's sharp gain, the market opened higher and the key index rose 44 points within the first hour of trading. But the rest of the session went down steadily, ultimately ending over 50 points lower.
DSEX, the key index of Dhaka Stock Exchange, slid 50.08 points or 0.79 per cent to settle at 6,211, after soaring 118 points in the previous day.
Before that the stock index lost 556 points in eight consecutive days, which prompted the government to intervene in the market to bring back investors' confidence.
The stock market regulator and the finance minister had taken a number of initiatives to increase fund flow in the stock market, but virtually failed to sustain the momentum amid increased sale pressure from the investors, market insiders said.
The Bangladesh Securities and Exchange Commission raised the margin-loan ratio to 1:1 while the finance ministry asked to extend the tenure and amount of the capital-market refinancing fund to support the moribund market.
"Despite the regulatory intervention, the confidence of investors is yet to be restored as uncertainties persist due to the un-abating Russia-Ukraine war and instability in the global commodity market," said a merchant banker, seeking anonymity.
The general investors followed a 'wait-and-see' approach and analysing the government moves before investing money in stocks, he said.
Besides, some investors who are stuck with heavy losses in their portfolios in the last few months might increase the sale pressure when they see the market rise, he added.
"Soaring inflation and further devaluation of local currency might hurt investors' sentiment further," said a leading broker.
The local currency lost its value by 40 paisa against the US dollar on Monday, just after one week of a similar fall. The local currency lost its value by Tk 2.10 or 2.45 per cent since January 2022.
Besides, the inflation rate is rising quickly owing to global commodity market instability. Inflation shot up to 6.29 per cent in April - highest in 18 months - amid persistently rising food and non-food prices.
The energy regulator has recommended raising the bulk electricity price by nearly 58 per cent, which will have a negative impact on companies' profitability, he said.
Meanwhile, BSEC on Monday raised the investment requirement for eligible investors to qualify for the quota benefit during initial public offerings (IPOs).
Each eligible investor, except for the pension fund, approved provident fund and gratuity fund, will have to increase their investment to Tk 30 million from the existing Tk 10 million on the cut-off date to avail the IPO quota benefit.
Each approved pension fund, provident fund or gratuity fund needs to raise its investment to Tk 15 million from Tk 5.0 million.
Two other indices also ended lower. The DS30 index, comprising blue chips, fell 14.69 points to finish at 2,295 and the DSE Shariah Index (DSES) shed 9.70 points to close at 1,367.
All the sectors witnessed price correction with general insurance losing 1.70 per cent, followed by engineering with 1.60 per cent, financial institution 1.10 per cent, telecom 0.90 per cent, food 0.70 per cent, pharma 0.40 per cent and banking 0.10 per cent.
Out of 376 issues traded, 278 declined, 55 advanced and 43 issues remained unchanged.
Turnover, a crucial indicator of the market, stood at Tk 6.60 billion, which was 0.30 per cent higher than the previous day's tally of Tk 6.58 billion.
Beximco continued to dominate the turnover chart with shares worth Tk 388 million changing hands, followed by JMI Hospital Requisite Manufacturing, GSP Finance, Silva Pharma, and Delta Life Insurance.
The Chittagong Stock Exchange (CSE) also ended lower with the CSE All Share Price Index (CASPI) shedding 117 points to settle at 18,282 and its Selective Categories Index (CSCX) losing 71 to close at 10,968.
Of the issues traded, 169 declined, 74 advanced and 38 issues remained unchanged on the CSE trading floor.
The port-city bourse traded 8.63 million shares and mutual fund units with turnover value of Tk 187 million.
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