Stocks fall following gas price hike
Stocks plummeted sharply yesterday, especially those of cement, ceramics, power and textile companies, as news spread of a gas price hike.
The DSEX, the bourse’s prime index, dropped 0.67 percent, or 36.69 points, before closing the day at 5,384.92.
Market insiders said since these sectors were largely dependent on gas, the price hike was likely to have an impact on profits for which the stocks were impacted negatively.
The energy regulatory authority on Sunday hiked tariff on the use of gas by different sectors.
The increase was 34.98 percent for commercial use (commercial buildings, offices and restaurants).
Following the hike, per unit cost of gas has been set at Tk 10.70 for industrial use and Tk 23 for commercial use.
Dhaka Stock Exchange (DSE) data shows that shares of 72 percent of listed cement manufacturers dropped yesterday while those of 60 percent of ceramic makers traded in the red zone.
Ceramics is predominantly a gas-run industry and one-tenth of its production cost is generated by gas bills, according to the Bangladesh Ceramics Manufacturers and Exporters Association.
So it fears that ceramic producers’ cost will rise by around 4.54 percent for the gas price hike.
The DSE data shows that fuel, power and spinning mills also observed a gloomy day. Fourteen out of a total of 19 fuel and power companies tumbled. Nine textile producers’ shares declined while eight gained.
Mohammad Ali Khokon, president of Bangladesh Textile Mills Association, said the latest spell of gas price hike would have a negative impact on the textile sector because it would make production costs rise.
Millers now have to spend Tk 7 for gas bills for producing every Tk 100 worth of yarn. “After the price hike of gas, the amount will increase to Tk 10,” he said.
However, turnover, another important indicator of the market, surged 2.76 percent to Tk 482.71 crore yesterday.
Runner Automobiles dominated the turnover chart followed by National Polymer, United Power Generation, Bashundhara Paper Mills and Esquire Knit.
Runner Automobiles topped the gainers’ list. On the other hand, SEML Growth Fund, a mutual fund, was the top loser shedding 5.56 percent. Of the traded issues, 143 gained, 174 declined and 36 remained unchanged.
The top three negative contributors to the index was Grameenphone, Square Pharmaceuticals and British American Tobacco Bangladesh.
Chittagong stocks also nosedived yesterday with the bourse’s benchmark index, the CSCX, decreasing 74.39 points or 0.73 percent to stand at 10,010.21.
Losers beat gainers as 115 stocks advanced, 126 declined while 23 closed unchanged on Chittagong Stock Exchange.