Stocks continue bearish trend amid uncertainty
During the first one and a half hours of trading, the majority of companies experienced price declines
The indices of the Dhaka Stock Exchange (DSE) continued their downward trend for the second consecutive session today (15 October), as investors remained cautious and showed little interest in buying shares due to uncertainty surrounding current market conditions.
Market insiders say after the fall of former prime minister Sheikh Hasina-led government, investors initially regained some confidence in the capital market. However, the optimism was soon dampened by financial scandals involving the previous government, along with ongoing economic and political instability, they say.
The share prices of most companies have been declining for several months, causing general investors to continuously lose funds. As a result, confidence in the capital market remains low amid the prevailing uncertainty, the insiders say.
Despite the bearish market trend, new investment opportunities are emerging, according to the insiders. They think that with the upcoming announcement of corporate earnings for the fiscal year ending in June, market activity is expected to pick up. The insiders say positive earnings reports could provide investors with opportunities for gains, potentially revitalising the market.
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The prime index, DSEX, decreased by 8 points to settle at 5,366 yesterday. Meanwhile, the blue-chip index, DS30, fell by 6 points to 1,964, while the shariah-compliant index, DSES, edged up by 4 points to 1,195.
Turnover decreased by 10.37%, amounting to Tk318 crore, down from Tk351 crore in the previous session.
Initially, the indices opened on a positive note, but the gains lasted only five minutes before the market began to decline, continuing the downward trend throughout the session. Large-cap stocks were particularly affected, contributing to the drop in the blue-chip index.
Key stocks that contributed to the decline included British American Tobacco Bangladesh Company, Square Pharmaceuticals, Power Grid, United Power, Beacon Pharmaceuticals, Titas Gas, Desco, Reckitt Benckiser (Bangladesh), Robi and Singer Bangladesh.
Out of the 398 issues traded on the DSE, 96 advanced, 252 declined, and 50 remained unchanged.
In its daily market commentary, EBL Securities noted that the capital market failed to shake off the bearish trend as selling pressure continued to dominate due to persistent confidence crises among investors amid prevailing concerns about the market's outlook.
According to the commentary, the market witnessed daylong volatility, with sellers dominating across the board, pushing most stocks further into correction mode. However, stocks in the banking sector remained resilient throughout the session.
Market participation remained sluggish as cautious investors chose to stay on the sidelines and monitor market movements, noted an official of a brokerage firm.
On the sectoral front, the banking sector contributed 21.4% of the day's turnover, followed by pharmaceuticals with 14.8%, and the IT sector with 12.3%.
Most sectors showed weak performance, with the jute sector declining by 3.0%, the general insurance sector falling by 2.0%, and the services sector dropping by 2.0%, contributing the most to the market corrections. On the other hand, financial institutions rose by 1.1%, banks increased by 1.0%, and the ceramics sector gained 0.9%.
The port city bourse, Chittagong Stock Exchange (CSE), also ended in negative territory. The selected indices (CSCX) and the All Share Price Index (CASPI) declined by 24.5 and 47.1 points, respectively.
Turnover on the CSE stood at Tk8.21 crore. Of the 185 issues traded, 42 advanced, 111 declined, and 32 remained unchanged.
