Stocks plunge as panic grips investors

Shares on the Dhaka Stock Exchange plunged yesterday as uncertainty over the course of the pandemic and the future of the economy gripped investors following the announcement of a countrywide shutdown from July 1.

The DSEX, the benchmark index of the premier bourse, closed 100 points, or 1.64 per cent, down at 5,992. This was the first time since April 2 that the index shed 100 points.

The massive dip pushed the key index of the DSE below 6,000 after 14 sessions. Shares on the Chittagong Stock Exchange also declined.

"The market fell mainly due to the uncertainty whether it would remain open or not during the lockdown," said Sheikh Mohammad Rashedul Hasan, managing director of UCB Asset Management Ltd.

The "complete lockdown" will be enforced from July 1 to contain the virus, which is sweeping the country. Coronavirus-linked deaths numbered 119 in the last 24 hours to yesterday, the highest in a single day. 

"Some people withdrew funds. As a result, the market came under selling pressure," Hasan said.

Blue-chip stocks, which are seen as relatively safer investments with a proven track record of success and stable growth, did not drop to a large extent as institutional investors did not follow suit.

"We are very positive about the market," Hasan said.

After the country went into a lockdown in March last year, the market had dropped, but it bounced back strongly.

The Bangladesh Securities and Exchange Commission said the market would remain open if banks were not closed.

A top official of the regulator said the commission was prepared to keep the trading open. Otherwise, it would send a negative message to the world, he said.

"No countries have shut the stock trading, so we will not close," he said.

People can give buy and sell orders through mobile phones. There are investors who also trade on their own on their mobile phones. So, there is no problem in keeping the market functional during the complete lockdown, he added.

"As there is deep uncertainty about whether the market would remain open during the imminent shutdown, some investors went for sales. Some investors had plans to cash in gains to prepare for the Eid-ul-Azha festival," said an investor, who has been involved in the market for nearly two decades.

Turnover, an important indicator of the market, however, surged 8.95 per cent to Tk 1,740 crore.

On the DSE, 54 stocks advanced, 306 declined, and 12 remained unchanged.

A top official of a merchant bank said people were concerned about the financial performance of the listed companies during the lockdown. So, many stocks decreased.

The profits of the listed companies dropped 30 to 35 per cent last year due to the two-month-long closure of factories.

Among all the sectors, textile rose 1.62 per cent as the garment industry would be out of the purview of the curb. Life insurance advanced 1 per cent.

General insurance dropped 4.71 per cent, and mutual funds fell 3.32 per cent, according to the daily market update of the UCB Stock Brokerage Ltd.

"We hope the government will not keep the production activities on halt for a long time," the merchant banker said.

Bangladesh Monospool Paper Manufacturing topped the gainers' list as it soared 9.98 per cent, followed by Matin Spinning, Shyampur Sugar Mills, Tamijuddin Textiles, and Paper Processing & Packaging.

Beximco Ltd was the most-traded stock with its shares worth Tk 103 crore transacted, followed by Dutch-Bangla Bank, Malek Spinning, Kattali Textiles, and Maksons Spinning.

Republic Insurance gave up the most as it slid 12 per cent. Sea Pearl Beach Resort & Spa, Pioneer Insurance, Sonar Bangla Insurance, and Agrani Insurance shed significantly.

The CASPI, the general index of the Chittagong Stock Exchange, dropped 297 points to 17,359.

Among 311 stocks traded, 58 advanced, 241 dropped, and 12 remained unchanged.



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