Dhaka stocks fell sharply on Thursday, the last trading session of the week, amid investors’ heavy share sales following the Bangladesh Bank’s reluctance in entertaining the stock regulator’s proposals on banks’ stock market exposure.
DSEX, the blue-chip index of Dhaka Stock Exchange, fell by 1.54 per cent, or 71.41 points, to close at 4,544.70 points on the day after losing 11 points in the previous day.
Turnover of the bourse, however, increased to Tk 858.81 crore compared with that of Tk 842.49 crore in the previous trading session.
‘The market fell heavily today [Thursday] as a section of investors went for huge sell-offs because of the central bank’s cold shoulder to the stock regulator’s proposal while some investors also booked profit after surge in previous few trading sessions,’ said a stock broker.
The Bangladesh Securities and Exchange Commission on Wednesday at a financial market regulator’s coordination meeting requested the central bank to consider a number of proposals including extension of 2016 deadline for cutting banks’ stock market exposure and not to consider banks’ long-term equity investment as stock exposure.
But the central bank told BSEC that it was up to the government to decide about the matter and BB had nothing to do.
‘Market reacted negatively as investors might have become upset over the outcome of the financial market regulators’ coordination meeting related to banks and NBFIs capital market exposure,’ former DSE senior vice-president Ahmed Rashid told New Age on Thursday.
He, however, also said that as recent statements of government high-ups were sympathetic and supportive over the market. So, it would be easier for the government to amend the bank companies act in a bid to incorporate the BSEC proposals.
Besides, the government is expected to introduce some business-friendly policies in the upcoming budget including reducing corporate taxes that will be also positive for the capital market, Rashid said.
Market operators said that along with the retail investors, institutional investors also sold shares heavily in a bid to book profit following sharp rise in share prices in last couple of trading sessions.
Of the shares and mutual funds traded on the day, just 71 advanced, 217 declined and 26 remained unchanged.
DS30, the blue-chip index of the bourse, closed at 1,731.44 points, shedding 1.63 per cent or 28.71 points on the day.
The Shariah index of the bourse, DSES, declined by 1.01 per cent, or 11.29 points, to finish at 1,099.42 points on Thursday.
‘On the last day of the week, market took a nosedive amid robust turnover where investors hurried to realize profit,’ IDLC Investments said in its daily market commentary.
‘However, turnover increased by 1.9 per cent to Tk 8.5 billion signaling panic sell by some quarter of investors,’ it said.
‘Equity benchmark fell further on Thursday, as market was under pressure in the presence of sellers with profit booking behavior outpaced cautious buyers throughout the trading session,’ LankaBangla Securities said in its daily market commentary.
‘After a weeklong rally in index, market showed up some correction today, pushing the index down to below 4600 mark,’ it said.
Khulna Power Company led the turnover chart on the day as its shares worth Tk 68.05 crore changed hands.
Grameenphone, RAK Ceramics, Summit Purbanchol Power Company, BEXIMCO, United Power Generation and Distribution Company, Western Marine Shipyard, ACI Formulations, AFC Agro Biotec and Summit Allianece Port were among other turnover leaders.
Apex Spinning gained the most on the day with an 8.16 per cent increase in its share prices, while EXIM Bank First Mutual Fund was the worst loser of the day, shedding 10 per cent.