Banking and telecom stocks slide, so does market

The market once again closed in the negative territory on Thursday as investors displayed a selling binge on banking and telecom stocks. 

DSEX, the prime index of the Dhaka Stock Exchange, dropped 69 points or 1.5 percent to close the day at 4,480. 

The Shariah-based DSES index also gave up 15 points or 1.5 percent to settle at 1,045, while the blue-chip index DS30 lost 25 points or 1.7 percent to stand at 1,492. 

At the Chittagong Stock Exchange, the benchmark index Caspi plunged 198 points or 1.4 percent to close at 13,743.

The indices displayed volatility on intraday performance graphs but kept on losing points from the beginning of the trading session. However, the graphs of the indices showed a moderate gain during the mid-session, but again declined gradually till the end of session. 

The market fall was explained by the confidence crunch among the investors, mainly on telecom and banking sectors, according to the Daily Market Review of EBL Securities Ltd. 

Telecom giant Grameenphone's crisis in settling the audit claim to obtain no-objection certificates from BTRC has weakened the investors' confidence on the stock, the review added. As a result, the company ended up losing 4.8 percent price Thursday on the DSE trading floor. 

Moreover, the Bangladesh Bank's recent circular on implementing single-digit interest rate on lending has led the banking stocks to take a toll, the review further added. The sector ended up in the correction territory for all five sessions of the week. 

The market review also informed that investors took a sideline approach after the BSEC chairman accepted to remain helpless regarding the ailing stock market. However, he has also announced that auditors will be appointed in the publicly listed companies to ensure publishing of transparent and accountable financial statements. 

Additionally, the finance minister has recently announced to reverse the postal saving scheme's interest rate from 6 percent to its previous level of 11.28 percent. According to the Daily Market Review of UCB Capital Management Ltd, this has affected the market adversely. 

All the sectors witnessed price correction on Thursday, with the telecom sector being the worst loser in terms of share price, shedding 4.7 percent in the sector return board. 

Among the other large-cap sectors, banks witnessed a price slide of 1.5 percent, pharmaceuticals sector slid 1 percent and financial institutions lost 0.8 percent. 

Turnover at the DSE decreased by 11 percent to Tk561.4 crore on Thursday, from Tk627.3 crore in the previous session. 

On the other hand, turnover at the port city bourse decreased 42 percent from Tk33.4 crore to Tk19.4 crore Thursday.

The pharmaceuticals sector contributed the highest, 26 percent, to the total turnover value, followed by textile stocks adding 14.9 percent, and engineering sector adding 14 percent.
 
Brac Bank was the most traded stock in the turnover chart with a turnover value of Tk30.8 crore, closing the day at Tk37.1 per share. The stock was followed by VFS Thread Dyeing Ltd with a turnover value of Tk16.7 crore, closing at Tk30.4 per share. 

Central Pharmaceuticals Ltd was once again the day's top gainer after advancing 9.5 percent and closing at Tk13.8 per share, said the DSE website.

Standard Ceramic Industries Ltd was the day's worst loser after shedding 8.7 percent and closing at Tk425.6 per share Thursday. 

Losers sharply outnumbered the gainers as out of the 356 issues traded, only 60 advanced, 250 declined, and 46 remained unchanged on the DSE trading floor.