Index at 3.5-month low, trading at 4-month low

Staff Correspondent

The country’s capital market is unable to break out of its downward spiral. The Dhaka Stock Exchange (DSE) witnessed a major decline on Sunday (October 19), the first working day of the new week. Despite the selling pressure across the market, the buyer crisis became apparent. As a result, the main index DSEX fell to its lowest level in three and a half months and trading fell to a near four-month low.

According to DSE statistics, shares and units of 396 companies were traded at the end of the day. Of these, only 44 increased in price, 314 decreased in price and 38 remained unchanged. Among the companies whose prices decreased, 175 were in ‘A’ category, 71 in ‘B’ category and 68 in ‘Z’ category.

In terms of indices, the main price index DSEX fell 75 points or 1.47 percent to 5,044 points, the lowest since July 9. On the other hand, the DSE Shariah Index (DSES) fell 24 points or 2.21 percent to 1,062 points and the DSE-30 Index fell 30 points or 1.51 percent to 1,938 points.

The market was also weak in terms of trading. A total of Tk 4.424 billion worth of shares and units changed hands on the DSE throughout the day—the lowest since June 25. A little over Tk 4.13 billion was traded that day.

Market analysts say that in recent times, various rumors related to margin loans are being spread in the capital market, which has created panic among investors. Some unscrupulous individuals and brokerage houses who are spreading rumors are misleading investors for their own interests. This is causing panic selling among panicked investors, resulting in a negative impact on the market.

In addition, the process of merging five banks, the decision to close several financial institutions, and the poor performance of June closing companies have added pressure to the market.

Dr. Al-Amin, associate professor of the Department of Accounting at Dhaka University and member of the Capital Market Reform Task Force, said,

“The law on margin lending has not yet been passed, yet some parties are spreading misleading information to investors. Those who are creating this panic must be brought under the law immediately. At the same time, if any brokerage house plays a role in this rumor, strict action must be taken against them.”

Meanwhile, the Chittagong Stock Exchange (CSE) also witnessed a similar picture. There was volatility in both the index and trading. The overall market index CSPI fell 195 points to 14,274 points and the CSCX index fell 114 points to 8,784 points.

A total of 178 shares and units of companies were traded on the CSE; of these, 31 increased, 134 decreased and 13 remained unchanged. At the end of the day, a total of 107 million taka was traded on the exchange, which is slightly more than the previous day (99.5 million taka).

According to market participants, the regulatory body must take swift and effective steps to restore investor confidence, otherwise the decline could deepen.