Stocks plummet on coronavirus fear
Dhaka stocks plummeted on Sunday, stretching the losing streak to the third session as investors remained cautious amid global forecast about the consequences of escalating coronavirus outbreak on the world economy including Bangladesh.
DSEX, the key index of the Dhaka Stock Exchange, plunged by 2.21 per cent, or 97.10 points, to close at 4,287.38 points on the day. The DSEX lost 178.68 points in the last three sessions and the index shed 470 points in the last 11 sessions with just two positive sessions.
The DSEX started losing from the very beginning of Sunday and descended more firmly to end the session deep into the negative trajectory as investors remained worried about the consequences of global escalation of the coronavirus epidemic, market operators said.
The Asian Development Bank in an analysis said that there could be a sharp fall in domestic demand, tourism and business travel, foreign investment, trade, and production linkages.
The magnitude of the economic losses will depend on how the outbreak evolves, which remains highly uncertain, it said.
EBL Securities in its daily market commentary said, ‘The ADB warned that the ongoing COVID-19 could eat up as much as 1.1 per cent or $3.02 billion off the economy, if the country continued to take a hit from the global epidemic.’
The Export Promotion Bureau continued to register declining export earnings till February, which plunged further by 1.80 per cent or $3.32 billion mainly because of a slowdown in export shipment, it said.
‘Many ailing macroeconomic factors such as lowering credit and deposit growth in the private sector, expecting inflation, and rising public debt from the banking sector have also led the market to the downward turn,’ the securities house said.
The media reported on March 5 that the United States and China included Bangladesh at high risk of the spread of coronavirus.
On Sunday afternoon, Bangladesh confirmed the first coronavirus case in the country, saying that three people were tested positive with the virus.
The Institute of Epidemiology, Disease Control and Research on Saturday warned that the Covid-19 that spread to 92 countries from China might enter Bangladesh anytime via travellers coming from affected countries.
The spread of coronavirus may severely affect the world economy including Bangladesh.
China, where the outbreak began first, is the single largest supplier of industrial raw materials for readymade garment and other sectors of Bangladesh.
The US, Italy, Spain and France which are also affected by the virus are major export destinations of the country.
The Organisation for Economic Cooperation and Development warned that the virus could cut global growth significantly and might be the ‘gravest threat’ to the global economy since the financial crisis more than a decade ago.
Share market analyst and Dhaka University professor Abu Ahmed told New Age that fear and uncertainty over the global outbreak of coronavirus affected the stock market.
He said that investors became cautious as the stock markets in the other countries continued falling and the global organisations warned over the looming impact of the virus.
DSE director Shakil Rizvi said that the investors were concerned about the spread of the virus to various countries.
‘There is nothing to be panicked,’ he said.
The average share prices of all the sectors except telecommunication dropped on the day.
Share prices of textile, bank, non-bank financial institution and energy sectors dropped by 3.9 per cent, 2.8 per cent, 2.4 per cent and 2.2 per cent respectively.
The turnover on the DSE increased to Tk 428.92 crore on Sunday from Tk 415.13 crore in the previous trading session.
Out of the 356 scrips traded on Sunday, 304 declined, 37 advanced and 14 remained unchanged.
DSE blue-chip index DS30 shed 1.86 per cent, or 27.24 points, to close at 1,435.00 points.
Shariah index DSES lost 1.66 per cent, or 16.86 points, to end at 999.06 points.
VFS Thread Dyeing led the turnover chart with shares worth Tk 13.22 crore changing hands on the day.
Square Pharmaceuticals, Khulna Paper & Printing Package, Khulna Power Company, Nahee Aluminum Composite, Orion Pharmaceuticals, Monno Jute Stafflers, Orion Infusions, LafargeHolcim Bangladesh and Generation Next were the other turnover leaders.
Apex Spinning gained the most on the day with a 9.96-per cent increase in its share prices while VFS Thread Dyeing fared the worst, dropping 9.89 per cent.