Dhaka stocks continued to slide for the second consecutive day on Thursday as the retail investors were yet to regain confidence in the market due to the state of dormancy of the Securities and Exchange Commission and the possibility of introducing tax in the capital market.
Market operators said general investors on the day went for sell-offs while most of the institutional investors remained inactive.
They said the delay in reconstruction of the SEC was making the investors confused about what was coming next. They said the rumours about imposition of capital gain tax and making taxpayer's identification numbers mandatory for opening beneficiary owner's accounts in the next national budget also discouraged investors from taking active part in trading.
They also said most of the institutional investors, especially the banks, took a wait-and-see policy as they were waiting for the announcement of the budget for the next fiscal year.
Market insiders said as the central bank took a hard line against the commercial banks, they went on backfoot.
'The news that the Bangladesh Bank will investigate the roles of nine commercial banks during the stock market crash in January has also affected the market,' said a stockbroker.
The benchmark general index, or DGEN, of Dhaka Stock Exchange declined by 42.54 points or 0.73 per cent to close the day at 5,718.07 points.
Turnover of the bourse on the day also dropped to Tk 426.49 crore, compared to previous day's Tk 455.04 crore.
Out of 256 issues traded on the day, 149 declined, 100 gained, and seven remained unchanged.
Trading on the DSE started in the negative zone on Thursday. The index fluctuated heavily in the first hour and then steadily inched down, ending the day in red.
DSE senior vice president Ahsanul Islam said, 'The investors are yet to regain confidence after the recent market crash and it will take some more time.'
In his opinion, 'What is most needed at the moment to address the situation is an effective and functional SEC.'
'A lot of work has to be done to develop the market from here on and the commission has to initiate those moves,' he added.
Source: New Age
