Investors passed another gloomy day yesterday as the benchmark index of the Dhaka Stock Exchange sank for the sixth consecutive day to hit a three-year low.
The DSEX shed 50.57 points to close at 4,711.30, the lowest since November 17, 2016.
Forced sales by stock brokers and merchant banks and the sell-offs by foreign investors are to blame for the plunge in the last few days, according to analysts.
The fear of the index to nosedive further has also pushed the general investors to go for selling shares, they said.
A managing director of a stock brokerage house, requesting anonymity, has acknowledged that they had to go for the forced sale in the last few days.
If the prices of securities bought with margin loans decrease past a certain point, the lenders can legally force the investors to sell some of their assets to save the fund.
“Many other brokers have done it following rules because we had no other option as the prices of the good stocks are plummeting.”
In the last few days, the stocks of the well-performing companies—where investors put in their funds through margin loans—were the top losers, he added.
Ali Xahangir, chief executive officer of amarstock.com, a website that provides technical analysis on market movements, said the index is falling because of the forced sale.
But the market may make a turnaround to some extent when this type of sale completes, he said.
He added that the investors are fearful and the nervousness is deepening as the Dhaka stocks continue bleeding.
The top three negative index contributors of the DSE was Grameenphone, LafargeHolcim Bangladesh and Square Pharmaceuticals. The three well-performing companies accounted for 26 points of the fall of the DSEX.
In the last six days, the index gave up 226.53 points and lost Tk 16,944.37 crore from its market capitalisation.
However, the turnover of the market edged up 1 percent to Tk 299 crore. Of the traded issues, 80 advanced, 231 declined, and 41 remained unchanged.
National Tubes dominated the turnover chart with shares worth Tk 17.14 crore changing hands, followed by Square Pharmaceuticals, Wata Chemicals, Bangladesh Shipping Corporation and Summit Power.
ML Dyeing was the day’s best performer with a 6.14 percent gain, while Evince Textile was the worst loser, losing 14.18 percent.
Chattogram stocks also fell with the bourse’s benchmark index, CSCX, declining 64.22 points, or 0.73 percent, to finish the day at 8,750.21.
Losers beat gainers as 145 declined and 59 advanced, while 31 finished unchanged on the Chittagong Stock Exchange. The port city bourse traded shares and mutual fund units worth Tk 13.20 crore.