Dhaka stocks saw yet another plunge, the latest in a series of recent collapses, as violent protests by angry retailers entered the second day in a row on Monday. The benchmark DSE General Index (DGEN) shed 4.8 per cent or 324.51 points to close at 6394.53, the lowest since January 20 this year when it fell 600 points in five minutes, forcing the regulator to suspend the trade.
The volume of trade also fell alarmingly as turnover clocked at Tk 6.0 billion, a decrease of 13 per cent over the previous session and the lowest in a year.
Hundreds of investors, who have been reeling under a confidence crisis, staged demonstrations sporadically outside the DSE building, chanting slogans against the regulators and authorities, damaging some brokerage firms and smashing some vehicles. Presence of investors on the trading floor was relatively thin due mainly to the countrywide daylong strike called by the main opposition party to protest mainly rising food prices and a recent stock market crash.
'Continued free fall and liquidity concerns have accelerated erosion of the investors' confidence,' said RY Shamsher, chief executive officer of the AB Investment Bank Limited.
At around noon, investors started to vent their anger by setting fires to papers, wood and other debris on the busy road in Motijheel, the commercial heart of the country.
They pelted brickbats at the entrance point of the central bank as they alleged that the central bank's raising cash reserve ratio has limited the bank's stock investments, leading to liquidity shortage in the market. They also damaged some offices, including Citi Bank NA, housed near the DSE.
The financial sectors were the worst losers. Banking issues, the market's bellweather, declined 5.15 per cent, non-banking financial institutions 5.32 per cent, life insurance 3.40 per cent and energy 5.32 per cent. Grameenphone, the most weighted shares in DSE, slipped 1.55 per cent even though it had declared 85 per cent cash dividend for the year ended 2010.
'Sliding confidence of investors because of the consecutive falls accelerated huge sell pressure and buyers were inactive in fear of further debacle,' said LankaBangla Securities in its market analysis. Investors' fury has been prevailing over the twin bourses since December last year as the DGEN lost 30 per cent since its peak of 8918.51 recorded on December 5, 2010.
On January 25, the government formed a committee to probe irregularities in the market. The Securities and Exchange Commission (SEC) took a number of steps to bring the confidence from brink but it was futile. Institutional investors, the key market players, along with retailers continued to remain inactive as they make no fresh investment in the market fearing overexposure in the market, said a merchant banker.
Source: The Independent
