Stocks keep falling as investors ‘lose’ trust in regulator

Stock investors protest at the relentless fall in share prices in front of the Dhaka Stock Exchange building at Motijheel in Dhaka on Tuesday. — New Age photo

Dhaka stocks on Tuesday plunged across the board as investors ‘losing’ trust in the market regulator rushed to withdraw funds from the capital market, said market operators and investors.
Some affected investors on the day continued protesting against relentless fall at the market, irregularities, questionable IPO approval. They demanded immediate resignation of Bangladesh Securities and Exchange Commission chairman M Khairul Hossain for his failure in reviving the market after the 2010-11 debacle.
DSEX, the key index of Dhaka Stock Exchange, plunged by 1.14 per cent, or 60.55 points, to close at 5,248.91 points on Tuesday after losing 16.91 points in the previous session. The index was lowest after December 19 last year, when it was at 5,242.56 points.
The market began to fall from the beginning and descended more firmly to end the session deep into the negative trajectory as investors ‘losing’ trust in the market regulator continued panic selling, market operators said.
Market experts said that failure of regulatory control over the capital market, ‘filthy’ IPO approval with huge amount of placement shares, relaxed punishment to fraudsters, manipulators and errant companies shattered investors’ trust and confidence.
Some affected investors took to the streets, protesting at the continuous plunge at the market, in front of the DSE building at Motijheel on Tuesday.
Protestors demanded immediate resignation of BSEC chairman M Khairul Hossain.
Investors at the rally questioned approval process of IPO of low-profile companies.
Khairul could not be reached over phone despite repeated attempts.
Former BSEC chairman Fraque Ahmed Siddique told New Age, ‘The stakeholders and the regulator should find out the reasons for the current distrust over the market and address that accordingly.’
EBL Securities in its daily market commentary said, ‘The market opened on a negative note and continued the declining trend till end of the session amid excessive selling pressure by cautious investors.’
‘Investors were reluctant to inject fresh funds even in this level fearing further fall. Investors lost their confidence and their participation has also decreased,’ it said.
The volatility at the market began with the liquidity shortage in the financial sector, which was worsened by the Grameenphone’s tussle with the telecom regulator over Tk 12,500 crore in dues.
The dearth of liquidity in the financial market that was raising the interest rate in recent days also concerned investors.
Investors felt it safe to withdraw their funds, market operators said.
They said investors were caught off guard by the relentless fall that resulted in a 700-point decline in last three and a half months.
Of the 345 issues traded at DSE on Tuesday, 253 declined, 59 advanced and 32 remained unchanged.
The share prices of Reckitt Benckiser plummeted by 19.4 per cent or Tk 615 to finish at Tk 2,501 each after the multinational company declared 700 per cent cash dividends for the 2018 with a fall in profits.
The prices of the company’s shares shot up from Tk 2,400 on February 25 to Tk 3,589 on April 9 amid the rumour that like BATBC, the low paid-up company might declare bonus dividend.
The average share prices of all the sectors declined on the day.
The share prices of energy, pharmaceuticals, telecommunication, non-bank financial institution and bank plunged by 1.9 per cent, 1.7 per cent, 1.5 per cent, 1.3 per cent, and 0.7 per cent respectively.
Among the large capitalised companies, a slump in the share prices of GP, United Power Distribution Company, Square Pharmaceutical and Investment Corporation of Bangladesh fuelled the volatility on the day.
The turnover on the bourse decreased to Tk 269.91 crore on Tuesday from that of Tk 296.02 crore in the previous trading session.
DSE blue-chip index DS30 also plunged by 1.29 per cent, or 24.54 points, to close at 1,876.81 points.
Shariah index DSES dipped by 1.33 per cent, or 16.43 points, to finish at 1,212.36 points.
Monno Ceramic Industries led the chart of turnover leaders with its shares worth Tk 17.56 crore changing hands on the day.
Fortune Shoes, Bangladesh Submarine Cable Company, Reckitt Benckiser, Square Pharmaceuticals, Grameenphone, Esquire Knit Composite, BRAC Bank, Shurwid Industries and Monno Jute Stafflers were the other turnover leaders.
Standard Ceramic Industries gained the most on the day with a 9.98-per cent increase in its share prices while Reckitt Benckiser was the worst loser, shedding 19.44 per cent.

 

Source: New Age.

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