Stock investors shy away from trading amid uncertainty

Only 13 shares rose on the Dhaka and Chittagong stock exchanges yesterday as investors worried about the economic uncertainty stayed away from trading, forcing the bourses to fall.      

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dropped 24 points, or 0.39 per cent, to close at 6,190, its lowest level since August 14. In the last two working days, the index shed 75 points.

On the DSE, 72 securities also dropped while 219 did not see any price movement.

Turnover, an important indicator of the market, fell nearly 17 per cent to Tk 351 crore, the lowest in 17 weeks.

Analysts say investors fear that the share prices could fall further given the current economic scenario, but it is not happening owing to the floor prices.

"So, investors are not making fresh bids to buy shares," said one analyst.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dropped 24 points, or 0.39 per cent, to close at 6,190, its lowest level since August 14

The floor price is the lowest price at which a stock can be traded. In July, the market regulator set it to halt the free fall of the indices amid the deepening global uncertainty.

The negative sentiments among the investors came from the decline in first quarter corporate earnings alongside the fears of a worsening macroeconomic situation in the coming months, said International Leasing Securities Ltd, a brokerage house, in its daily market analysis.

Of the 300 companies listed with the DSE and whose financial results for the July to September quarter are available, 110 posted a reduced profit, 38 slipped into losses for the first time while the losses for 30 firms widened.

Investors are also anxious that the same performance may repeat in the ongoing quarter or beyond since the factors responsible for the current global crisis and the strain facing Bangladesh's economy, such as the Russia-Ukraine war, the global energy shortage, higher commodity prices, and runaway inflation, are still there.

In another unpromising development, the Bangladesh Energy Regulatory Commission yesterday increased the electricity price at the wholesale level, the price paid by distributors to power producers, by 19.92 per cent.

If the hike translates into the price adjustment, as usually happens, at the retail level, the inflation, which is already running at a record high, may accelerate further, dealing a fresh blow to consumers, facing one of the worst cost-of-living crises in recent decades. This will also mean lower sales for firms and thus, lower profit. 

The DS30, the index that consists of blue-chip companies, declined nearly 3 per cent to 2,177, while the DSES, the shariah-complaint index, fell 5.86 per cent to 1,343.

All the sectors witnessed price correction except tannery, which was up 0.4 per cent, and textile, which inched up 0.1 per cent.

The paper sector saw the sharpest correction, falling 6.8 per cent. The IT sector was down 5.9 per cent and the jute sector gave up 5.2 per cent.

Chartered Life Insurance topped the gainers' list, advancing 9.98 per cent. Bangladesh Welding Electrodes, Sonali Life Insurance, JMI Hospital Requisite Manufacturing, and Sandhani Insurance were also among the major gainers.

Aamra Networks suffered the worst fall, giving up 12 per cent. Genex Infosys, Intraco Refueling Station, Bangladesh Monospool Paper Manufacturing, and Bashundhara Paper Mills each dropped more than 8 per cent.

The Caspi, the all-share price index of the Chittagong Stock Exchange, declined 61 points, or 0.33 per cent, to end the session at 18,382.

Of the 134 issues that traded on the bourse in the port city, 50 declined and 71 did not show any change. Turnover, however, rose nearly 38 per cent to Tk 13.15 crore.