Dhaka, Bangladesh (BBN) – Bangladesh’s stocks faced a major setback last week, snapping 13 weeks gaining spell, as investors sharply retorted to the monetary policy statement (MPS).
Brokers said investors sitting on profit fiercely sold the shares speculating a further correction in coming days following the central bank’s concern over the recent bullish momentum in the capital market.
The central bank in its latest MPS said, “Effective surveillance is necessary so that the process of recovery from the bearish trend since 2010 remains under the regulator’s control”.
“Otherwise, investors will seriously be affected like previous times,” Bangladesh Bank Governor Fazle Kabir said while announcing the monetary policy for the second half of the fiscal year on Sunday last.
The week featured five trading sessions as usual.
Of them, three sessions fell sharply while two closed marginally higher.
DSEX, the prime index of the Dhaka Stock Exchange (DSE), fell 253.51 points or 4.5 per cent to settle the week at 5,365.14.
LankaBangla Securities, a stockbroker, said, “The sharp fall in index was accompanied by decreased activity, with market turnover and trading volume decreasing by 45 percent and 49 percent respectively”.
The two other indices also fell sharply.
The DS30 index, comprising blue chips, shed 81.58 points or 4.0 per cent to finish at 1,956.90 points.
The DSE Shariah Index slumped 37.70 points or 2.92 per cent to close at 1,254.79 points.
The port city bourse, Chittagong Stock Exchange (CSE), also plunged with its Selective Categories Index, CSCX, losing 485.33 points or 4.60 per cent to close at 10063.65.
“Sudden drop in turnover in the last few trading days indicates that investors were staying on the sidelines and observing the market movement carefully,” said an analyst at a leading brokerage firm.
The total turnover for the week fell drastically to BDT 47.97 billion on the DSE, which was BDT 86.57 billion in the week before.
The daily turnover averaged at BDT 9.59 billion, registering a decline of nearly 45 percent over the previous week’s average of BDT 17.31 billion.
City Bank Capital Resources, said, “This correction was triggered by the sale pressure of institutions for their month end adjustment”.
“So the selling pressure intensified on continuous fall of large and mid-cap stocks, especially massive blow on bank and NBFIs and insurance sectors stocks,” said the City Bank Resources.
The losers took a strong lead over the gainers as out of 330 issues traded, 281 closed lower, 44 closed higher and 5 remained unchanged on the DSE trading floor.
Beximco dominated the week’s turnover chart with shares of BDT 1.86 billion changing hands, followed by Islami Bank, Ratanpur Steel Re-rolling Mills, LankaBangla Finance and Baraka Power.
Rahim Textile Mills was the week’s best performer, posting a 18.47 per cent gain, while ICB AMCL Second Mutual Fund was the worst loser, slumping by 19.15 per cent.