Institutional investors fear further fall in stocks

Shares on the Dhaka Stock Exchange fell for the third consecutive day yesterday, pulled down by thin participation of institutional investors amid deepening pessimism among general investors.

The DSEX, the benchmark index of the country’s premier bourse, dropped 32.05 points, or 0.65 percent, to stand at 4,862.25. In the last three days, the index gave up 54.43 points.

“We have money to invest in the stock market but we are afraid because there might be further fall,” said a top official of an asset management company.

He said he has talked to other institutional investors to understand the market trend but none was optimistic about a boost.

“In fact, most of the investors are fearful about further fall. So, we have adopted the wait-and-see approach,” he said. 

A merchant banker said investors don’t believe that the market would revive as the index has remained almost unmoved despite many government measures in favour of the market recently.

The Bangladesh Securities and Exchange Commission (BSEC) took a number of reform measures in May. It brought in 21 changes to the primary market and some changes to the secondary market. 

The government provided some incentives in the budget, including doubling the tax-free limit of dividend income to Tk 50,000 for general investors.

The Bangladesh Bank also came forward to enhance the investment scope of financial institutions by easing the market exposure conditions. The central bank has said it would lend to banks to help them invest in the market.

Despite all the initiatives, the market has been falling and the key index nosedived below the 4,900-point level.

“It means the main problem of the market is lack of confidence,” another merchant banker said, adding investors are losing money owing to manipulation but no exemplary punishment has been handed out to the manipulators on the part of the regulator.

Turnover, another key indicator of the market, has remained sluggish at Tk 300 crore on an average, which is not adequate for the brokerage houses to cover daily expenditures. 

Brokers say shares worth at least Tk 1,000 crore should change hands every day to help them run operations smoothly.

Of the traded issues, 68 advanced, 241 declined and 43 closed unchanged on the premier bourse.

Meghna Condensed Milk was the day’s best performer with an 8.67 percent gain, while Al-Haj Textile was the worst loser, shedding 9.87 percent.

The top two negative index contributors were Grameenphone and British American Tobacco Bangladesh, according to IDLC Securities.

National Tubes dominated the turnover chart with shares worth Tk 23.87 crore being traded, followed by Square Pharmaceuticals, Summit Power, Standard Ceramics, and Monno Jute Stafflers.

Chittagong stocks also fell with the bourse’s benchmark index, the CSCX, declining 47.63 points, or 0.52 percent, to finish the day at 8,988.74.

Losers beat gainers as 155 issues declined, 59 advanced and 37 finished unchanged on the Chittagong Stock Exchange.