Stocks bleed, mistrust peaks

The premier index of the Dhaka Stock Exchange (DSEX) continued its downward trend amid persistent political and economic uncertainty, triggering panic selling and deepening investor mistrust. Moreover, investors are increasingly frustrated with the current securities commission due to its internal instability and failure to restore market confidence.

Last week, general investors staged a protest in the Motijheel area, demanding the resignation of BSEC Chairman Khondoker Rashed Maqsood. They allege that he lacks a proper understanding of the market and has failed to regain investor trust. Even respected former BSEC chairmen and market stakeholders have raised concerns about his leadership.

Market insiders attribute the continued downturn to several factors, including a sharp rise in gas prices, which is expected to increase production costs across industrial sectors, further unsettling investors. Institutional participation remains weak, while retail investors are steadily exiting the market.

At the end of last week, the prime index, DSEX, decreased by 55 points to 4,918. Meanwhile, the blue-chip index, DS30, was down by 22 points to 1,823, the Shariah-compliant stocks index, DSES, decreased by 11 points to 1,094, and the DSE SME Index (DSMEX) down by 11 points to 923.

However, the weekly average turnover increased by 2.59% to Tk353 crore compared to the previous week, with the total turnover at Tk1,410 crore, up from Tk1,718 crore. However, market capitalisation decreased by 1.04%, to Tk6,56,569 crore from Tk6,63,450 crore.

Of the 412 issues traded at DSE, 158 advanced, 199 declined, 37 remained unchanged, and 19 were not traded.

Midland Bank led the weekly gainers among individual stocks with a 17.51% increase to Tk20.80, SEML Lecture Equity Management Fund 16% to Tk11.60, and United Finance 14.75% to Tk14.  

In its weekly market commentary, EBL Securities noted that the capital bourse's benchmark index extended its bearish trend amid lacklustre trading activity. Wary investors chose to stay on the sidelines, still reeling from the ongoing market downturn and mounting portfolio losses. Despite BSEC's liquidity relief measures, particularly the relaxation of negative equity provisions for market intermediaries, the initiative failed to reverse the market's continuous downturn.

Moreover, investors remained cautious, closely monitoring earnings disclosures from listed companies for the recently ended quarter, and preferred shifting positions into stocks with favourable earnings calls for a potential quick return in the struggling market, according to the market commentary.

Investors were most active in the Banking sector (16.1%), followed by Food (13.7%) and Fuel & Power (11.0%).

Most sectors closed in the green, except for the Paper sector, which edged up by just 4.8%, and the Telecom sector, which was the biggest loser with a decline of 5.1%.