Dhaka, Bangladesh (BBN)– The country’s prime bourse –Dhaka Stock Exchange (DSE) – went to the negative zone again in the last week after a week in the green zone with a significantly declining trend in turnover, market operators said.
The investors reacted negatively following the central bank’s latest policy interest rate hike, fearing further liquidity dearth in the market, they added.
“The central bank’s latest move relating to policy interest rate hike will further restrict credit flow from banks into the private sector and is not good news for the capital market which is suffering from liquidity crunch,” said a market operator.
The central bank hiked its policy interest rates by 50 basis points after more than two months to curb inflationary pressures on the economy which came into effect from Monday last.
The central bank increased the interest rate on repo to 7.25 per cent from 6.75 per cent, while the reverse repo rate was raised to 5.25 per cent from 4.75 per cent aiming to curb inflationary pressures on the economy.
To break the stalemate, the regulator gave stock split stimulus to spur the market activities before Eid vacation but the split recipe was largely outshone by the cautionary move of investors after the central bank’s policy interest rate hike apart from other factors, said LankaBangla Securities.
Investors who have been waiting to participate are now sceptical of taking fresh exposure in the market amid very poor activities, it added.
However, some said that the market plummeted due mainly to lower participation of investors on the first two days of trading after the nine-day Eid vacation, as many investors were in a holiday mood.
The week witnessed five trading sessions as usual of which four lost while only one gained.
During the week, the benchmark General Index, the key index of the DSE, went down by 134.68 points or 2.17 percent to close at 6,077.32.
The broader All Shares Price Index (DSI) shed 107.27 points or 2.06 percent to close at 5,088.42. The DSE-20 Index comprising blue-chip shares also lost 45.95 points or 1.10 percent to close at 4,144.51.
Total turnover value stood at BDT 15.94 billion against BDT 16.79 billion in the previous week.
Average daily turnover value declined to BDT 3.18 billion, down by 24.05 percent compared to BDT 4.19 billion in the previous week.
The market capitalisation was BDT 2,957.85 billion on the opening day of the week and at the end of the week it stood at BDT 2,899.63 billion, a 1.97 per cent lower.
Out of 262 issues traded, only 22 advanced and 239 declined while one remained unchanged during the week.
AB Bank topped the week’s turnover chart with shares worth BDT 2.01 billion changing hands.
The turnover leaders were Lafarge Surma Cement, Titas Gas, Jamuna Oil, Beximco Limited, Square Pharma, MI Cement, City Bank, UCBL and National Bank.
Renata Ltd was the week’s highest gainer posting a rise of 6.14 per cent. It was followed by Anlima Yarn, BD Autocars, Reliance Insurance, Monno Stafflers, Legacy Footwear, Prime Bank, BATBC, Beximco Pharma and ACI 20% Convertible Zero Coupon Bonds.
The DSE has already taken an initiative to sit with top 30 brokers on Sunday to discuss the declining turnover, the overall market situation and find out the way how the market can be stabilized.
BBN/SSR/AD-10Sept11-12:10 pm (BST)
