DSE Market Cap drops by Tk2,000cr, indices plunge amid investor panic
According to the market insiders, investor confidence has also been undermined by rising dissatisfaction with the BSEC
Amid a persistent bearish trend, the market capitalisation of the Dhaka Stock Exchange (DSE) dropped by Tk2,000 crore, as growing political and economic uncertainties prompted investors to offload shares.
The continued sell-off has caused the key index, DSEX, to decline further, triggering panic and deepening mistrust among market participants ahead of the upcoming national budget.
The market capitalisation of DSE decreased by 0.32%, to Tk6,46,985 crore from Tk6,49,090 crore.
Keep updated, follow The Business Standard's Google news channel
At the end of the week, the prime index, DSEX, decreased by 147 points to 4,638. Meanwhile, the blue-chip index, DS30, was down by 47 points to 1,730, the Shariah-compliant stocks index, DSES, decreased by 36 points to 1,011, and the DSE SME Index (DSMEX) down by 22 points to 926.
However, the weekly average turnover decreased by 8.16% to Tk264 crore compared to the previous week, with the total turnover at Tk1,581 crore, down from Tk1,722 crore. Of the 413 issues traded at DSE, 68 advanced, 303 declined, 24 remained unchanged, and 18 were not traded.
According to the market insiders, investor confidence has also been undermined by rising dissatisfaction with the Bangladesh Securities and Exchange Commission (BSEC). Concerns over internal instability within the commission and its failure to restore stability in the market have further rattled investors.
Last week, general investors formally demanded the removal of Khondoker Rashed Maqsood from his position as BSEC chairman, holding him responsible for poor leadership amid ongoing turmoil in the capital market. In a meeting last week, they urged Dr Anisuzzaman Chowdhury, special assistant to the chief adviser, to take action and remove Maqsood from office.
Market analysts attribute the continued decline to several factors, including a sharp rise in gas prices, which is expected to push up industrial production costs. Institutional investors remain largely inactive, while retail investors continue to exit the market.
In its weekly market commentary, EBL Securities noted that the benchmark index of the capital bourse resumed its free fall this week as the prolonged bearish market sentiment has been further exacerbated by heightened political unrest and pre-budget uncertainties, with no respite for the unnerved investors while losses continue to mount on their already hampered portfolios.
Although the regulator introduced several initiatives to strengthen governance among listed companies, these measures fell short of easing the market's prolonged downturn, while the benchmark remained subdued to a 5-year low amid lackluster trading activities.
Moreover, concerns over potentially unfavorable dividend declarations for 18 listed banks due to the central bank's stringent regulatory measures also added further strain to the ailing market.
However, bargain hunters emerged in the final trading session, showing renewed buying interests in particular blue-chip scrips that had undergone significant corrections and were trading at attractive valuations, leading the market to witness a positive session following a losing streak of six consecutive sessions, according to the market commentary.
