Stocks tumble to 27-month low
Dhaka stocks sank to a 27-month low yesterday, compelling aggrieved investors to stage a hunger strike in front of the Dhaka Stock Exchange building.
The DSEX, the benchmark index of the DSE, dropped 62.73 points to close at 5,175.46.
In the last one month, the bourse lost Tk 29,264 crore, or 7.10 percent, from its market capitalisation.
In protest, general investors observed a hunger strike that went on for three and a half hours.
They were coaxed out of their strike by Rashed Khan Menon, a member of the parliament, who assured them that their demands would be relayed to the prime minister.
Menon, who is also president of the Workers Party of Bangladesh, expressed his accord with the investors’ demands, urging the government to take action such that the gamblers cannot make off with investors’ money.
Like the investors, he also called for resignation of M Khairul Hossain, the longest serving chairman of the Bangladesh Securities and Exchange Commission, as the last extension handed out to him in April 2018 for two years was not legal.
Hossain had failed to bring in well-performing companies. Under his eight-year reign, sub-par companies got listed: they showed inflated earnings and incurred losses soon after listing, they said.
He has failed to take adequate steps against gamblers and directors of listed companies when they breach the law, they alleged.
Many listed companies’ directors do not hold the minimum 2 percent shares individually and 30 percent jointly, said Ataullah Naeem, one demonstrating stock investor. “But still the regulator has not taken any initiative against these directors,” he said, adding that the BSEC has also failed to initiate the buyback law.
If a stock’s price falls below its issue price the company’s directors should buy back their shares, he added.
Another demonstrating investor, Mizanur Rahman, said while there was a liquidity crunch in the banking sector, the recent market fall has created room for institutional investors to invest more without breaching their market exposure ceiling.
And yet they are sitting out in the sideline, which suggests there are deeper issues with the stock market and the regulator should get to the bottom of it.
Furthermore, the message coming out from the government is not inspiring confidence at all.
“When they should be taking action they are not finding anything wrong with the market,” he added.
Last week, Finance Minister AHM Mustafa Kamal said the DSE’s bear run since February is nothing unusual, going so far as to blame the media for playing up the downward trend.
“The market may rise and fall in the short-term but it is not in a bad condition as the journalists wrote. The stock market behaves like this everywhere,” he told reporters after a meeting with the BSEC at its headquarters in Dhaka.
Doubling down on the message was Salman F Rahman, the prime minister’s private sector industry and investment adviser, who on Sunday said the rise and fall was a nature of all stock markets and stakeholders should be comfortable with it.
On the same day, Kamal said in the parliament that the government does not have full control of the country’s share market. “But we have identified the problems and will solve them one after another,” he added.
Meanwhile, turnover, another important indicator of the market, declined 13.26 percent to Tk 298.61 crore.
Of the traded issues, 86 advanced, 217 declined and 44 closed unchanged.
Fortune Shoes dominated the turnover chart with its transaction of 32.92 lakh shares worth Tk 12.27 crore, followed by Genex Infosys, Monno Ceramic, Bangladesh Submarine Cable and Brac Bank. The most negative contributors to the index were Grameenphone, Berger Paints and British American Tobacco.
Eastern Insurance was the day’s best performer with its gain of 14.10 percent while Malek Spinning was the worst loser with its loss of 9.63 percent.
Chittagong stocks also fell, with the bourse’s benchmark index, the CSCX, declining 107.77 points, or 1.18 percent, to finish at 9,602.88.
Losers beat gainers as 157 declined, 47 advanced and 29 finished unchanged on Chittagong Stock Exchange.
The port city bourse traded 43.37 lakh shares and mutual fund units worth Tk 11.58 crore.