Stock market collapses due to sharp price decline, Tk 18,000 crore disappears in a week

Economic Desk

The country’s stock market has seen a massive decline in prices over the past week. With virtually no positive response in the market, the share prices of most companies have remained in a downward trend. At the end of the week, it can be seen that the market capitalization of the Dhaka Stock Exchange (DSE) has decreased by about 18 thousand crore taka in a week.

At the same time, there has been a big decline in the indices, and the average daily turnover has also decreased significantly. Market experts say that this long-term negative trend in the market is due to investor confidence and a lack of new funds.

According to the DSE’s weekly statistics, a total of 56 companies saw their share and unit prices increase last week, while 326 companies saw their prices decrease and 14 remained unchanged. That is, the number of companies on the decline list is almost 6 times higher than the number on the rise list.

As a result of such a steep decline in prices, the market capitalization of the DSE stood at Tk 6,99,285 crore at the end of trading on Thursday (October 17), the last working day of the week. At the end of the previous week, this figure was Tk 7,17,126 crore. As a result, the market capitalization decreased by Tk 17,841 crore or 2.49 percent in a week. In comparison, the capital decreased by Tk 7,937 crore or 1.09 percent in the previous week.

Along with capital, there was a big collapse in the index. The main price index of DSE, DSEX, fell by 164.30 points or 3.11 percent during the week. The index fell by 132.07 points or 2.44 percent in the previous week. The DSE Shariah index, which consists of Islamic Shariah-based companies, fell by 47.98 points or 4.23 percent. The index fell by 37.71 points or 3.22 percent in the previous week.

The DSE-30 index, which is made up of selected good companies, also faced a big decline. Last week, the index fell 65.12 points, or 3.20 percent. The index fell 48.80 points, or 2.34 percent, in the previous week.

Along with the decline in market prices, trading has also slowed down. On average, shares and units worth Tk 522.22 crore were traded on the DSE every day throughout the week. The average trading volume in the previous week was Tk 657.12 crore. As a result, the average daily trading volume decreased by Tk 134.90 crore or 20.53 percent.

Domination Steel Building Systems Limited was the top traded company. The company’s shares traded an average of Tk 20.32 crore per day throughout the week, which is 3.89 percent of the total traded shares. Orion Infusion Limited had the second highest traded share, with an average of Tk 20.17 crore per day. CVO Petrochemical Refinery Limited, which was in third place, traded an average of Tk 16.77 crore per day.

In addition, the top 10 companies in terms of transactions include Summit Alliance Port, Pragati Insurance, Pragati Life Insurance, Khan Brothers PP Woven Bags, Rupali Life Insurance, Square Pharmaceuticals and Simtex Industries.

According to market analysts, investors are now suffering from extreme uncertainty due to the continuous price decline. Many are selling shares and withdrawing from the market for fear of losing capital. They also believe that stability will not return to the market quickly unless new interest from institutional investors increases.

Analysts also said that political uncertainty, rising interest rates, liquidity crunch in the banking sector and weak financial results of companies are negatively impacting the market. They believe that this downward trend may continue unless effective steps are taken by the market regulator to restore confidence.