With the new DSE index decreasing by 279.32 points, the country’s stocks on Monday witnessed a record fall in history triggered by coronavirus scare after first three COVID-19 infected cases were reported on Sunday. Market analysts said, “It is the second highest decline in core index of DSE history as Dhaka Stock Exchange (DSE) saw a rapid fall that was more than 500 points in a day in December, 2010.”
Worried investors, as a result, continued their selling spree on sector-wise securities apprehending further dip in the market as investors lose their confidence in the threat of coronavirus outbreak, they mentioned. Eminent economist and market expert Prof Abu Ahmed told Bangladesh Post, most of investors were panicked after hearing the news of three coronavirus cases in Bangladesh on Sunday and sold their shares to avoid further losses.
Besides, poor macroeconomic indicators, dearth of quality stocks and liquidity crunch worsened the ongoing confidence crisis among investors, he mentioned. Ahmed said the share market has been going through bad patches due to a drop in foreign investment, fear of instability of the market coupled with thin participation of institutional investors.
The government should immediately prepare the ground well in order to undertake a drive to develop a long-term financing capital market”, he added. The economist further said the government should encourage good companies, including local as well as multinational companies like Unilever, Nestle and Robi, to offer IPOs.
Ahmed mentioned that the government should make some rules and give incentives including reducing corporate tax for listed companies to encourage good companies to be listed in the stock market. The government should give cash support to the market like easy lending from banks, listing organisations and direct fund support in the market through ICB or Brokerage houses to help rebound the market, he added.
DSE director Md Shakil Rizvi said various rumours have spread among investors in the country after the negative impact on the global capital market, including India and Pakistan. Investors should not sell shares in frustration, he said, adding that coronavirus will not last long in the country.
Market analysts said the share markets continued downward trend as investors were reluctant to inject fresh funds into stocks following Coronavirus scare. However, the prime index of the Dhaka Stock Exchange (DSEX) lost by 279.32 points or 6.51 percent to close at 4008.05 on the day.
The DSEX has decreased by a total of 376.42 points in the past two straight sessions in current week. On the other hand, the DS30 index, comprising blue chips, declined by 88.89 points to settle at 1,346.11 and the DSE Shariah Index decreased by 69.79 points to finish at 929.27 during the time.
The total turnover on the DSE went up to Tk 4,993.50 million during the time against Tk 4,289.28 million in previous day. The market capitalisation of the DSE decreased to Tk 3,142.19 billion on Monday from Tk 3,315 billion in the previous day. The losers strongly beat the gainers as out of 355 issues traded, 352 ended lower, only 2 closed higher and 1 remained unchanged on the DSE floor.
Square Pharma dominated and became the top on Monday turnover chart with 882,488 shares worth Tk 156 million changing hands. It was followed by GP (Tk 135 million), LHBL (Tk 118 million), Sumit Power (Tk 104 million) and SEAPEARL (Tk 102 million).
Mutual Trust Bank was the best performer, posting a gain of only 0.75 percent while the Prime Finance First Mutual Fund was the worst loser, losing 10 percent on Monday.
Meanwhile, the Chattogram Stock Exchange (CSE) also saw negative trend on Monday with its selective category index (CSCX) losing nearly 466.88 points to close at 7,470.67 points. On the other hand, all Share Price Index of the CSE was lower by almost 769 points to 12,328.79 points.
At the CSE, total 256 issues were traded. Among them, 248 closed higher, 4 ended lower and 4 remained unchanged during the time. However, the number of shares transacted on the floor of the CSE was almost 12.73 million and the total turnover in value was almost Tk 703.10 million last week.
