They said that fresh rumours about imposition of tax on capital gain and making the use of tax identification number mandatory for beneficiary accounts in the next budget had affected further the investors who had become jittery because of last five months volatility in the market.
The benchmark general index of Dhaka Stock Exchange, or DGEN, lost 118.93 points or 2.10 percent on Tuesday, to close at 5,519.87 points after the DGEN had advanced marginally on Monday following a 287-point plunge on Sunday.
'Although different wings of the Investment Corporation of Bangladesh including the Bangladesh Fund purchased shares worth Tk 37 crore on the day, but they failed to keep the market afloat,' said a DSE official.
After Sunday's crash, the Bangladesh Fund, a Tk 5,000 crore open-ended mutual fund, could rescue the market on Monday, but investors continued to lose faith in the market as the government was yet to clear its position on appointment of a new chairman of the SEC and rumoured tax measures, said a stockbroker.
'Most of the institutional investors are now inactive. It is not possible for Bangladesh Fund to keep the market afloat. Besides, investors also know that the Bangladesh Fund could manage only Tk 500 crore so far as most of the sponsors are yet to chip in their portion,' he said.
Trading on the bourse started on a positive note as the index gained around 40 points in the first ten minutes. But for next half an hour the DGEN curve fluctuated heavily. At around 12 noon the index started crawling down and ended the day in a negative zone.
Turnover on the day dropped significantly to Tk 382.36 crore which is Tk 44 crore less from the previous day.
Out of 245 traded issues, only 28 advanced while 215 suffered heavy losses in share prices and two remained unchanged.
Investors, who had observed hunger strike, staged a sit-in programme and rowdy demonstrations in the previous two days, remained in the brokerage houses on Tuesday.
Mahmood Osman Imam, a finance professor of Dhaka University, said, 'Government inaction over stabilising the market is making the investors more and more panicked as they are now completely trackless about what's coming next.'
Osman said the government should immediately come up with an action for stabilising the market to ensure the investors about its willingness to improve the situation.
Md Fayekuzzaman, managing director of ICB, said, 'We are trying the best from our end to stabilise the market, and I hope the market will be stabilised soon.'
Ahsanul Islam, senior vice president of DSE, said, 'Investors are panicked and that pushed the market down today.'
He said that an immediate government move with substantial measures would help to restore the investors' confidence.
'The investors should not pay heed to rumours and government should came up with some encouraging schemes for the capital market to address the situation,' he added.
Source: New Age
