Gas crisis, margin rule uncertainty weigh on bourse

The country's premier bourse started the week on a dismal note today (16 August), with the benchmark index extending its losing streak for a third consecutive session amid growing concerns over the gas crisis and possible changes to margin rules.

Market insiders said concerns over the impact of gas shortages on industrial production, coupled with uncertainty surrounding regulatory changes, prompted investors to offload shares, pushing most traded securities into negative territory.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) fell 23 points, or 0.39%, to close at 5,859. The blue-chip DS30 index also declined 8 points to 2,184.

Market breadth remained heavily skewed towards losers, with 247 issues declining against 102 gainers, while 41 remained unchanged.

Despite the decline in share prices, trading activity increased significantly. Turnover rose 22% to Tk1,130 crore, suggesting that the higher transaction volume was largely driven by selling pressure.

Investors remained cautious as concerns over gas shortages and uncertainty surrounding regulatory measures continued to weigh on market sentiment.

According to the daily market review by EBL Securities, the benchmark index continued its downward trajectory as investors chose to remain on the sidelines, awaiting greater clarity on the potential changes to margin rules. Market participants are intently assessing how these regulatory amendments will impact future liquidity and trading activity. 

The brokerage firm further noted that expectations of weaker corporate earnings, fueled by the ongoing gas crisis which is severely hampering factory capacity utilisation, triggered the broad-based decline.

Sheltech Brokerage Limited observed that the market performance was primarily shaped by persistent selling pressure amid cautious sentiment. While the market opened with a brief spark of buying interest that lifted the DSEX to an intraday high of 5,916 points, the gains proved short-lived.

On the sectoral front, the general insurance sector emerged as the day's primary engine of activity, accounting for 26.4% of the total turnover. It was followed by the textile and pharmaceutical sectors, which contributed 19.8% and 9.6%, respectively. 

Sectoral returns were mostly negative across the board. The life insurance sector faced the steepest correction of 2.4%, followed by jute and paper. 

In a rare divergence from the overall gloom, the general insurance sector managed to post a gain of 2.2%, while the telecommunication sector stayed marginally afloat with a 0.2% uptick.

In the individual scrip segment, Mithun Knitting and Zaheen Spinning topped the gainers' list, both hitting the 10% upper circuit limit. Other notable gainers included Global Insurance, Alif Manufacturing, and Pacific Denims. 

On the flip side, the losers' list was led by FAR Chemical, which shed 8.07%, followed by Sharp Industries, ML Dyeing, and Yeakin Polymer. In terms of liquidity, Malek Spinning, Beximco, and Samorita Hospital remained the most traded stocks of the day.

The bearish sentiment was mirrored at the Chittagong Stock Exchange (CSE), where the broad CASPI index plummeted by 68 points to finish at 15,735. The Selective Categories' Index (CSCX) also ended 46 points lower at 9,581.  However, much like the premier bourse, the port city exchange witnessed a significant 64% jump in turnover, which settled at Tk75 crore.