Stocks drop on profit booking
The stock market dropped yesterday owing to a profit booking tendency, with investors prompted to go for sales by a Bangladesh Bank directive on banks to curb channelling of stimulus funds to unproductive sectors, including the share market.
The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), dropped 20.18 points, or 0.31 per cent, to 6,404 from the previous day.
The central bank on Sunday directed the country's lenders to increase monitoring on how loans from the stimulus packages were being used. It said to have found some cheap funds being channelled into unproductive sectors, like the stock market.
The market index is now at its historical highest, so there is already a fear that a correction could occur anytime, said a merchant banker, preferring anonymity.
Moreover, the central bank directive may push up sales, so many investors are booking profits, he said.
The market, however, should not depend on "seasonal money" and it should stand on the real investors' funds, he added.
If any fund had come from stimulus packages, it is not expected, he said, adding that investors should give thought into investing in stocks based on their fundamentals.
"The stock market is risky and a place for long term investments, so we don't want to see any artificial funds here," said an asset manager.
Because such funds may lead to a ballooning of the market and then its bursting, both of which are not expected, he said, adding that there were many potentials for real funds to be drawn to the stock market.
The interest rate in the banking sector is now low, at 5 per cent to 6 per cent, so people are preferring the stock market, he said.
Turnover, an important indicator of the market, rose 5.4 per cent to Tk 1,428 crore yesterday compared to the previous day.
At the DSE, 111 stocks advanced, 229 fell and 34 remained unchanged.
Baraka Patenga Power topped the gainers' list, rising 9.93 per cent, followed by Global Heavy Chemicals, Sonali Paper & Board Mills, Familytex (BD) and Central Insurance.
Stocks of Baraka Patenga Power were traded the most, worth Tk 75 crore, followed by SAIF Powertec, British American Tobacco Bangladesh, Beximco and Fu-Wang Ceramics.
ICB AMCL Second Mutual Fund shed the most, falling 5.7 per cent, followed by Shinepukur Ceramics, Index Agro Industries, Usmania Glass Sheet Factory and Purabi General Insurance Company.
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