Junk stocks decline
Junk stocks, whose gain is a common sight at the Dhaka Stock Exchange, at last saw a session of declines yesterday just a day after the bourse delisted two of them.
On Wednesday, the DSE delisted Modern Dyeing and Rahima Food Corporation for having no operations for over three years.
The delisting came into effective yesterday, leading to the decline in price of 41 out of 44 junk stocks.
“This is a good move of the DSE,” said Monzur Morshed Khan, managing director of Trust Bank Investment, a merchant bank.
He said investors should be careful about junk stocks but they were usually not, so the DSE came forward for the sake of the capital market.
“We alert people all the time to refrain from investing in junk stocks, but they do not pay heed,” said KAM Majedur Rahman, managing director of the DSE.
So, junks stocks are more active in the market which discourages good investors as well as good companies from entering the market, he said.
The DSE chief said the bourse cared about general investors and so would assist anyone who took any steps against the two delisted companies.
Companies also bear the responsibility of catering to the needs of their shareholders, Rahman added.
Market insiders said investors realised the consequences and risks of taking up junk stocks following the DSE move, so the junk stocks faced a heavy sales pressure.
The DSE should take up this type of measures at regular intervals to create awareness among investors about junk stocks, they said.
Stocks on the DSE gained slightly yesterday for a second consecutive day. The DSEX, the benchmark index of the premier bourse, rose 3.24 points, or 0.06 percent, finishing the day at 5,337.42.
Turnover, another important indicator of the market, also jumped 5.64 percent to Tk 912.23 crore, with 18.89 crore shares and mutual fund units changing hands.
Of the traded issues, 150 advanced and 153 declined with 34 securities closing unchanged on the premier bourse.
BBS Cables dominated the turnover chart with 51.10 lakh shares worth Tk 50.64 crore changing hands, followed by Golden Harvest, The Ibn Sina, Legacy Footwear and Monno Ceramic. Among the major sectors, engineering increased 1.74 percent followed by textiles (1.50 percent), fuel and power (1.47 percent) and life insurance (0.64 percent).
Conversely, banks and the financial institutions declined 0.82 percent and 0.66 percent respectively.
Padma Islami Life Insurance was the day's best performer with 10 percent gain followed by National Polymer, Rupali Life Insurance, Global Heavy Chemicals and Regent Textile.
Emerald Oil was the worst loser shedding 10 percent followed by Jute Spinners, Samata Leather, Savar Refractories and Shyampur Sugar.
Chittagong stocks also soared with the bourse's benchmark index, CSCX, advancing 39.78 points to finish the day at 9,948.08.
Gainers beat losers as 121 issues advanced and 112 declined, while 19 finished unchanged on the Chittagong Stock Exchange. The port city bourse traded 1 crore shares and mutual fund units worth Tk 152.13 crore.
M Shaifur Rahman Mazumdar, managing director of the CSE, said the turnover was a bit higher because of a large number of block and foreign trades.