Stocks plumb new depths

The domestic stock market dropped to a two-month low yesterday as investors remained on the sidelines.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), shed 50 points, or 0.73 per cent, to hit 6,855 yesterday while it was 6,823 on August 28, the previous lowest in recent times.

"Investors have lost their confidence in the market as the prime index remained in a downward trajectory for the last several weeks," a stock broker said.

The market started to fall on October 10 and in the past month since then, the benchmark index has dropped more than 512 points, or 7 per cent, according to DSE data.

"If the index bounces back strongly, then the investors could regain their confidence," he said, adding that many listed companies have announced their yearly dividends so investors are rearranging their portfolio as well.

The Dhaka bourse slipped into the red after a single session break as investors opted for booking quick gains on sector-specific stocks, said International Leasing Securities in its daily market review.

The stock has dropped to a two-month low as investors remained on the sideline.

The market started with a positive note but couldn't sustain it after the first hour and then dropped down in a gradual manner, it added. At the Dhaka bourse, 49 companies' stocks rose, 303 fell and 15 remained the same.

Sena Kalyan Insurance topped the gainers list, rising 10 per cent, followed by Meghna Pet Industries, Shyampur Sugar Mills, Fareast Finance, and Gemini Sea Foods.

Stocks of LafargeHolcim Bangladesh traded the most, worth Tk 222 crore, followed by NRB Commercial Bank, Alif Industries, Fortune Shoes, and Orion Pharmaceuticals.

Quasem Industries shed the most, dropping 6.83 per cent, followed by Prime Textiles, Zaheen Spinning Mills, First Finance and Bangladesh Monospool Paper Processing.

"As many stocks already dropped in the last few weeks, investors' shares are in the red zone now. So, if they sell shares now, they will have to incur losses," a merchant banker said.

In this situation, investors do not want to sell shares but on the other hand, they do not have enough confidence to invest more funds to buy shares averaging at lower prices either.

"Only if their confidence can be regained will they invest again," the merchant banker added.

Among major sectors, the food and allied, life insurance, and miscellaneous sectors experienced price appreciation while cement, services and real estate and non-banks faced correction.

The Chittagong Stock Exchange (CSE) also fell yesterday, as the CASPI, the general index of the port city bourse, dropped 119 points, or 0.59 per cent, to 20,078.

Among 288 traded stocks, 64 advanced, 207 dropped and 17 remained the same.