Stocks’ freefall continues as maiden coronavirus-related death confirmed
Investors passed another terribly gloomy day yesterday as the key index of the Dhaka Stock Exchange plunged 4.46 per cent on a day an elderly man with underlying health conditions became the first Bangladeshi to die after testing positive for coronavirus.
DSEX shed 168.60 points to end at 3,603, the lowest since May 12, 2013, as the fast-spreading coronavirus kept investors at bay.
Stocks have lost 627 points, or 14.83 per cent, in the last four trading days. It fell 18.41 per cent since the virus was first detected in the country on March 7.
At the time of writing, the total number of active coronavirus cases in Bangladesh stands at 14 and one person died of the lethal, pneumonia-like virus.
The deceased was over 70 years of age, said Meerjady Sabrina Flora, director of the Institute of Epidemiology, Disease Control and Research, adding that the patient had multiple pre-existing complications like chronic obstructive pulmonary disease, high blood pressure, heart problems and diabetes.
Market analysts say investors are panicked because they fear if the coronavirus pandemic spreads across the country and becomes severe, Bangladesh may face lockdown like many countries around the world.
So, they were selling shares, said an analyst.
"It would be wise to have money at hand instead of stocks during any pandemic," said Shamsuddin Plabon, a stock investor, adding that if the virus shuts the country it will impact the earnings of listed companies heavily.
In 2010, when the stock market crashed, DGEN, the main index of the bourse then, had plunged 926 points, or 10.79 per cent, in just five days. The fall continued for months and saw erosion of half of the index value.
But the broader index has been falling steeply because the panic is deeper this time. The market has been bearish for the last six months before the coronavirus-induced fall.
"The decline is eroding the value of our stocks badly because we had not seen much profits before the crash," said a merchant banker.
"Besides, we had earned money before the crash of 2010. But this year, we are waiting for a havoc," the merchant banker said.
Yesterday, a rumour was going round that the trading at the stock market would be suspended, spreading panic among investors and prompting them to dump shares.
However, the DSE has denied the rumour. But, it decided to cut the trading hours by an hour in line with a government's decision that shut educational institutions.
The bourse took the decision in an emergency board meeting at the DSE's head office in Nikunja.
From today, the trading will start at 10.30am and continue until 1.30pm, said the DSE in a press release. Previously, trading was allowed until 2:30pm. The new trading hour will continue until further notice.
The same trading hour will also be applicable at the Chittagong Stock Exchange as well.
The premier bourse also encouraged investors to enhance trading using mobile phones or digital systems.
"We have no plan to shut trading because such a decision will create more panic among investors," said a director of the DSE.
Globally, no countries except Jordan and the Philippines suspended trading owing to the coronavirus pandemic.
According to New York Stock Exchange President Stacy Cunningham, a shutdown is not likely.
"Closing the markets would not change the underlying causes of the market decline, would remove transparency into investor sentiment and reduce investors' access to their money," she said in a statement.
This would only further compound the current market anxiety, she added.
That market anxiety has come in the form of massive equity declines over the last few weeks that have triggered four circuit breakers. The S&P 500 and the Dow Jones Industrial Average are down roughly 30 per cent from their previous record highs.
Turnover, another important indicator of the DSE, rose 5.5 per cent to Tk 429 crore.
Among the large-cap stocks, Brac Bank dropped 9.9 per cent, United Power 8.6 per cent and BATBC 5.2 per cent.
Square Pharmaceuticals was the top traded stock with a turnover of Tk 18.6 crore.
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