A downtrend continued on the twin bourses for the fourth straight day although state-owned commercial enterprises were asked by the government to go into big buying to stabilise the stockmarket.
The benchmark General Index of Dhaka Stock Exchange (DGEN) shed 337 points, or 5.8 percent, to close at 5,463 points Sunday. The DSE general index lost a cumulative 924 points in four days of trading.
The selective price index of Chittagong Stock Exchange slumped 604 points, or 5.7 percent, to close at 9,953 points.
In the wake of a continuous downtrend, the government once again pressured the state-owned commercial banks to buy heavily into the markets in an effort to halt the bearish trend.
The government institutions are Sonali Bank, Janata Bank, Agrani Bank and the Investment Corporation of Bangladesh (ICB).
The government on February 15 provided Tk 200 crore to the state owned companies to buy shares to bring normalcy back to the market as well as to boost investor confidence.
Khondkar Ibrahim Khaled, chairman of Bangladesh Krishi Bank and former deputy governor of the Bangladesh Bank, held a meeting with the officials of the Securities and Exchange Commission to get their opinions on the current market trend.
Market insiders observed that most merchant banks, including big institutional investors, are incurring losses, so they have no buying power due to the credit crunch they are facing.
Some of small and institutional investors lurched into panic-selling as they anticipated another debacle in the stockmarket, they added.
A group of investors is trying to leave the market by selling all stakes of their portfolios, said a market operator. The government initiatives failed to stabilise the market, he added.
In different brokerage houses in Dhaka, investors complained that the government did not want to stabilise the market.
Salahuddin Ahmed Khan, who teaches finance at Dhaka University, said: “I don’t understand what the government wants with the capital market.” State-owned companies failed to steady the market as they do not have sufficient funds for big buying, he added.
Khan also said the government should make a big fund for the state owned companies, adding that most of the institutional investors also went for big selling of shares to leave the market.
Akter H Sannamat, a market analyst, said the credit crisis and lack of confidence pushed down the market.
The market declined across the board with banks, NBFIs, telecommunications and fuel and power shedding 6.2 percent, 6.1 percent, 7.6 percent and 3.94 percent respectively.
Of the total 255 issues traded on the DSE, 249 declined and six advanced, while daily turnover stood at Tk 501 crore, down by Tk 57.98 crore from the previous day.
Beximco topped the turnover leaders trading 98.17 lakh shares worth Tk 24.19 crore Sunday. The other turnover leaders were Prime Finance and Investment, Peoples Leasing and Financial Services, Bextex, Grameenphone, Union Capital, AB Bank, Southeast Bank, Titas Gas and Bay Leasing and Investment.
Asia Insurance was the highest gainer of the day, posting 8.07 percent rise in its share price, while the Mutual Trust Bank lost the most, as its share price shed 23.13 percent.
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