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Dhaka Stock Exchange loses 300 points in six days


FE REPORT
| Published: May 20, 2024 11:46:18 PM


The main index of the Dhaka Stock Exchange lost more than 300 points in just six days as nervous investors continued their sell-off, fearing a further fall in stock prices amid ongoing economic worries.
The market witnessed a freefall from the start of the session on Monday as shaky investors went into heavy sell-off, dragging the key index down 5,400 points soon after the start of trading. Bargain hunters subsequently showed some interest in troubled stocks, helping the market recover almost half of its initial losses.
The DSEX, the main index of the Dhaka Stock Exchange, eventually fell over 37 points or 0.69 percent to settle at 5,393, a new 37-month low since April 20, 2021.
Significant price erosion of selective large-cap stocks such as BAT Bangladesh, Beximco Pharma, Beacon Pharma, Prime Bank and Kohinoor Chemicals have contributed significantly to the decline in the index. They have collectively wiped 16 points off the DSEX.
The DSEX lost 943 points or 15 percent since the abolition of the floor price in January this year, while the market value of the DSE fell Tk 968 billion.
“The panic-stricken investors are reluctant to take positions in equities and continue to reduce their exposure to escape further losses due to continued subdued market sentiment,” EBL Securities said.
Sellers continued their dominance on the trading floor, leading a majority of stocks to extend their losses, while many hit the 3 percent lower circuit breaker without enough buyers, the stockbroker said.
The Bangladesh Securities and Exchange Commission (BSEC) on April 24 lowered the lower limit of the circuit breaker to 3 percent from 10 percent to slow the decline in the index. This has hardly led to positive results.
Market operators said investors had long been facing a crisis of confidence as persistent economic uncertainties and the country’s macroeconomic signals affected investor sentiment.
Investor sentiment deteriorated following the recent 50 basis point hike in policy rates due to monetary tightening, while news of a possible capital gains tax of over Tk 4 million worsened the market situation.
Meanwhile, Prof. Dr. Hafiz Md. Hasan Babu, chairman of the DSE, on Monday urged the chairman of the National Board of Revenue (NBR) not to levy capital gains tax, considering the interests of investors and the capital market.
The blue chip index DS30, a group of 30 leading companies, lost more than 9 points to 1,938, while the DSES Index, which represents Sharia-based companies, lost 11 points to 1,180 on Monday.
Sales, a crucial indicator of the market, amounted to Tk5.61 billion, up 37 percent from the previous day.
All sectors faced selling pressure, which led to price erosion of more than 71 percent of the shares. Of the 389 issues traded, 278 declined, 81 advanced and 30 remained unchanged.
The Chittagong Stock Exchange (CSE) also extended its losing streak with the CSE All Share Price Index – CASPI – losing 132 points to settle at 15,605 and the Selective Category Index – CSCX – losing 79 points to 9,393.

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