Dhaka bourse passes volatile week ‍after Eid vacation

Infographic: TBS

The benchmark index of the Dhaka Stock Exchange (DSE) concluded the past week with a 3.03% decline over four trading sessions, driven by a significant sell-off of shares.

A substantial number of stocks traded at the bourse witnessed price erosion as investors continued withdrawing investments due to fears of further decline.

According to the DSE, a total of 285 stocks experienced price erosion during the past week, which lasted four working days starting on 15 April. Additionally, 89 stocks advanced in price, while 21 stocks remained unchanged.

Before Eid-ul-Fitr, stocks experienced a notable surge for three consecutive sessions, with expectations of the reappointment of Shibli Rubayat-Ul Islam as the Bangladesh Securities and Exchange Commission's (BSEC) chairman for another four years.

However, after the Eid vacation, stocks experienced a prolonged downturn, with excessive selling pressure dragging down the benchmark index below the 5,700-point mark for the first time in three years.

EBL Securities, in its weekly market commentary, noted that the benchmark index of the country's premier bourse resumed its free fall in the first week following the Eid vacation, plunging to a three-year low. Investor sentiment towards market momentum has noticeably dampened due to macroeconomic uncertainty stemming from recent geopolitical crises.

"The market witnessed the dominance of sellers throughout the week as investor confidence remained shaky, allowing bears to retain control. However, investor participation in the market slightly rebounded, with average turnover increasing by 10.0% to Tk478 crore compared to Tk434 crore in the previous week," the commentary reads.

Market insiders and stock analysts attribute the downturn to increasing interest rates, making fixed-income instruments more appealing than stocks. As a result, investors stand to lose more money amidst the continuous market decline. Conversely, holders of government Treasury bonds and bills are poised to enjoy favourable returns.

The stock market is also experiencing heightened volatility due to global economic uncertainties stemming from the fresh conflict between Iran and Israel, according to analysts. Additionally, the crisis in investor confidence is worsened by regulatory uncertainty and upcoming tax policies, making it difficult for investors to make informed decisions.

According to the DSE, the weekly turnover dropped to Tk1,912.81 crore as trading continued for four days, compared to Tk2,174.20 crore in the previous week that lasted for five days.

The blue-chip index DS30 dropped by 2.35% to 1,984 points, while the shariah-compliant index DSES declined by 2.79% to 1,246 points, and DSMEX (DSE SME Index) fell by 8.02% to 1,665 points.

Asiatic Laboratories topped the gainer list with an 18.14% gain to Tk50.80 each, followed by Deshbandhu Polymer with a 17.91% gain to Tk34.90 each, and SEML Lecture Equity Management Fund with a 17.57% gain to Tk8.70 each.

On the other hand, National Bank topped the loser list with a 14.29% decline to Tk6 each, followed by Makson Spinning Mills with an 11.89% decline to Tk12.60 each, and Metro Spinning Mills with an 11.32% decline to Tk18.80 each.

The top three most-traded stocks were Asiatic Laboratories, Taufika Food and Lovello Ice- Cream, and Alif Industries.