Retail investors are in despair as DSE witnesses volatility. BBN file photo

Dhaka, Bangladesh (BBN)– Bangladesh’s stocks tumbled last week that ended on Thursday as worried investors sold shares heavily.

Market operators said growing political tension coupled with fears of liquidity shortage due to the central bank’s latest directive to slash the limit of banks’ advance-deposit ratio (ADR) kept most of the investors at bay.

However, the leaders of Bangladesh Merchant Bankers Association (BMBA) and DSE Brokers Association said in a press briefing on Wednesday that the investors overreacted.

On Tuesday, the central bank instructed conventional banks to lower their loan-deposit ratio to within 83.5 percent and Shariah-compliant banks to within 89 per cent by June 30 with a view to curb in aggressive lending.
Four out of five trading sessions of the week witnessed sharp fall.

DSEX, the prime index of the Dhaka Stock Exchange (DSE) went down more than 194 points or 3.13 percent to settle at 6,021.

Two other indices of the premier bourse also saw sharp fall. The DS30 index, comprising blue chips, plunged 76.77 points or 3.33 percent to finish at 2,228 and DSES (Shariah) slumped 34 points or 2.40 percent to close at 1,397.

The port city bourse Chittagong Stock Exchange (CSE) also dragged down with the CSE All Share Price Index — (CAPSI) –slumping by 537 points or 2.80 percent to finish at 18,623.

The Selective Categories Index of the port city bourse — CSCX, also plunged 322 points or 2.78 percent to settle at 11,249.

According to International Leasing Securities, the investors panicked, mainly stimulated by the rising political tension in the few days and the Bangladesh Bank’s instruction for lowering of ceiling for banks’ loans-deposit ratio.
The stockbroker noted that the investors mostly liquidated their holding from financial institution, engineering, bank and fuel power sectors.

“The corporate declarations during the week of some listed companies also failed to meet the investors’ expectation,” the stockbroker said.

“Index passed one of the most bearish weeks in the last two years,” commented LankaBangla Securities, in its weekly market analysis.

The stockbroker noted that the market seems to be feeling the after effects of monetary policy announcement.
“Although the rumoured advance-deposit ratio regulation change was actually less strict than anticipated, market reaction has been vastly negative, with very slow participation throughout the week,” the stockbroker said.

Bearish sentiment also reflected on the trading activities as the daily turnover averaged BDT 338 billion, which was more than 12 percent lower than the previous week’s average of BDT 4.49 billion.

The losers took a strong lead over the gainers as out of 338 issues traded, 274 closed lower, 48 higher and 16 issues remained unchanged on the DSE trading floor.

Grameemphone (GP) topped the week’s turnover chart with 1.99 million shares worth BDT 1.0 million changing hands, followed by Square Pharmaceuticals, IFAD Autos, Monno Ceramic Industries and LankaBangla Finance.
Monno Ceramic was the week’s best performer, posting a gain of 18.11 percent while National Polymer was the week’s worst loser, slumping by 12.09 percent.