Shaken investor confidence pushes stocks down

Fears of prolonged political chaos continued to rattle stocks with the price indices slumping for the fourth session in a row yesterday.

A non-stop blockade, enforced by BNP, persisted for the 16th day yesterday, halting the supply chain as well as affecting activities on the Dhaka and Chittagong stock exchanges.

DSEX, the benchmark general index of the premier bourse, dropped 73.73 points or 1.51 percent, finishing the day at 4,783.21 points.

DSES, the shariah index, also declined 16 points or 1.39 percent to close at 1,134.35 points.

Investor confidence has been eroding gradually with the worsening political situation, leading them into panic sell-offs, said a top official of a stockbroker.

“Investor presence in the brokerage houses is declining by the day,” he said, adding that it seems political insecurity will continue for a long time.

Worried by the continuous fall, a group of retail investors yesterday placed a 10-point recommendation to the Bangladesh Securities and Exchange Commission, the central bank, the twin bourses and the state-run Investment Corporation of Bangladesh.

The recommendations include stopping IPO approval for next six months, allowing share trade in negative equity accounts, taking steps to increase banks’ participation in the market and holding a coordination meeting with all stakeholders.

It was another tough day for stocks, and the bourses have seen a steep fall in indices since the beginning of this week, LankaBangla Securities said.

“Fears over the impact of prolonged political unrest might be the reason behind the ongoing skid in stocks,” the stockbroker added.

IDLC Investments in its regular analysis said the market encountered a panic-shaken free-fall during yesterday’s session.

However, the benchmark index recovered slightly in the last trading hour, the merchant bank said.

As investors tried to minimise losses amid fears of a further fall in turnover, an important indicator of the market, it rose 14 percent to Tk 281.92 crore compared to the previous day.

Losers outnumbered gainers as 248 declined, 36 advanced and 25 issues remained unchanged on the DSE.

A total of 1.1 lakh trades were executed with 8.66 crore shares and mutual fund units changing hands on the premier bourse.

All the major sectors closed in the red. Non-bank financial institutions took the maximum hit after plunging 2.77 percent, followed by cement 2.14 percent, fuel and power 1.3 percent, banks 1.02 percent and telecom 0.57 percent.

Debutant C&A Textiles topped the turnover chart with 1.87 crore shares worth Tk 42.55 crore changing hands.

The third ICB Mutual Fund was the day’s best performer, advancing 7.15 percent, while newly listed National Feed Mill was the worst loser, slumping 10.64 percent.

The Chittagong bourse’s CSCX index declined 120.26 points to 8,885.55.

Only 26 issues advanced, 195 declined and 19 remained unchanged on the port city bourse.

A total of 1.19 lakh shares and mutual fund units traded on the Chittagong Stock Exchange, generating a turnover of Tk 32.68 crore.