Stocks fall as investors lose appetite for fresh buy
Stocks fell 1.75 percent yesterday due to lack of action on retail and institutional investors' part.
The DGEN, the benchmark General Index of the Dhaka Stock Exchange, lost 76.66 points to close the day at 4,283.87 points.
The precarious macroeconomic condition has persuaded investors to liquidate their positions to stem further losses, IDLC Investments said in its market commentary.
“Besides, they kept vigilance to the monetary policy statement. It seems that investors are reducing portfolio exposure,” it said.
Investors offloaded shares expecting tight monetary policy in the fist half of this fiscal year, said Imtiaz Munna, a member of Bangladesh Share Investors' Association.
Institutional investors made hefty profits from the market but now they are not supporting the market to arrest the unusual downtrend, he said.
But, according to other market analysts, prolonged depression in the market has lent to severe liquidity shortages for institutional investors as most of their investments are stuck.
The absence of institutional investors reduced the turnover of the premier bourse, which in turn discouraged retail investors, said a market director of DSE.
The retail investors want to quit the market, so whenever the market goes up they sell off their shares at a minimum loss, the director said.
The market was going through a bullish trend until World Bank's cancellation of the Padma Bridge loan on Saturday, which had a negative impact on the economy and therefore the stockmarket, he added.
Turnover still rose 13.8 percent from the previous day, to Tk 159 crore.
A total of 0.65 lakh trades were executed with 3.87 crore shares and mutual fund units changing hands at the Dhaka bourse.
Among the major sectors, power lost 2.82 percent, followed by pharmaceuticals at 1.67 percent, telecoms 1.47 percent and non-bank financial institutions 1.43 percent. The banking sector, which represents 30 percent of total market capitalisation, lost 1.23 percent.