DSE, Share market

Ariful Islam

The share market plays a vital role in the economic development of a country, and as such, government, industries and even the central bank keep a close eye on its activities.
Recently, the country’s market has witnessed a downward trend that has been continuing since the first day of the current year, 2018, leading to a loss of confidence among investors to inject new funds into the market.
The prime index of the Dhaka Stock Exchange (DSE) went down by more than 892 points, or 14.26 percent, to settle at 5,362.28 points on Thursday, since 1 January 2018.
Meanwhile, the blue chips index (DS30) slumped by 350 points or 15.56 percent to close at 1,926.46 points on Thursday from 2,281.55 points on January 1, 2018.
The market capitalisation of the DSE dropped to Tk 3,863 billion on Thursday as against Tk 4,234 billion on first working day of the current year.
However, stock prices went down for a fourth straight week in a bearish market that has not seemingly responded positively to certain measures to restore investors’ confidence.
Investors are showing their selling spree on the sector wise securities, especially on financial sector shares, as these sectors have faced several problems, for which investors have lost confidence in the market.
The prime index of the Dhaka Stock Exchange (DSEX) went down by 43 points or 0.80 percent during the last week, to settle at 5,362 on Thursday.
“The stocks fell at both bourses as investors have showed selling of shares mostly from financial institution, banking, pharmaceutical, cement, and food sectors,” said a market analyst.
The financial institution posted the highest loss of 4.1 percent, followed by banking with 2.80 percent, pharmaceutical 2.50 percent, cement 1.8 percent and food & allied 1.10 percent.
However, some investors took position in the paper, fuel & power, ceramic and textile sector stocks, anticipating better performance in the upcoming financial disclosure, analyst said.
Meanwhile, the comprising blue chips (DS30) fell 33 points to finish at 1,926 and the DSE Shariah index lost 2.48 points to end at 1,262 during the last week.
On the other hand, the port city bourse, the Chittagong Stock Exchange (CSE) also saw negative trend during the last week with its selective category index (CSCX) losing nearly 25 points to close at 9,984.
Although the government, Bangladesh Bank and regulator have taken several initiatives to stable the share market, it has not been possible as yet for lack of coordination, resulting in the market facing difficulties.
Taking to Bangladesh Post, many investors said, the share market usually remains less active some time. But this time, the investors think it is a bit unusual.
The government should quickly take proper initiatives, they said, adding that otherwise, the investors can again lose confidence in the market like in 2010 when some of the bearish investors manipulated the share market resulting in the market collapse badly, at the time.
Market analysts said, the stock market needs special attention as the recent government measures like raising the liquidity of the private sector banks, are seen not enough to revive the confidence of the investors.

They said, the stock markets have seen volatility, and a losing streak extending to four consecutive weeks, as investors have offloaded shares for an uncertain situation.

The analysts said, continued selling of shares, especially those of financial institutions and banks, triggered the week’s sudden decline of the index.
Eminent economist and market expert Prof Abu Ahmed told Bangladesh Post,the share market witnessed a continuous fall as most of the companies, particularly banks, have failed to satisfy the investors with their earnings and dividends.

As a result, most of the investors are selling their shares to flee the market, they said.

“The government should immediately prepare the ground quite well, in order to undertake a drive to develop a long-term financing capital market”, Ahmed said.

The eminent economist said, the government should encourage good companies, including local as well as multinational companies, to offer IPOs.