Aug 20, 2023

Dhaka stocks fall for 2nd week amid political tensions  

Dhaka stocks fell for the second consecutive week as investors continued selling shares amid concerns over political tensions in the country, market operators said.

The key index of the Dhaka Stock Exchange, DSEX, lost 0.15 per cent or 9.65 points over the past week to close at 6,329.86 points on August 3 after losing 26.10 points in the previous week.

The market operators said that the investors, who have been grappling with prolonged bearishness in the market, went on share sales amid potential resurgence of political tensions ahead of national election.

Most investors preferred to remain on the sidelines to observe the next move in the market.

The recent political movements, including rallies, protests and demonstrations, made investors worried about the country’s economy, which has already been struggling with multiple crises.

The country’s economy has been grappling with various challenges, including high inflation, volatility on the foreign exchange market, dollar and energy crisis, in recent months, the market operators said.

The market gained for two sessions in the five-day week, which indicated that the market struggled to generate strong upward momentum.

Despite these challenges, the market managed to see some slight gains, primarily driven by low-profile companies.

However, many well-performing companies remained constrained by floor prices.

The operators said that prolonged bearishness on the market also diminished the investors’ enthusiasm for new investments and most of the companies were restricted by floor prices, limiting the investors’ ability to rebalance their portfolios effectively.

In July 2022, the Bangladesh Securities and Exchange Commission imposed the floor price restriction on all companies to prevent any excessive fall in stock prices amid economic worries.

EBL Securities in its weekly market commentary said, ‘The benchmark index of the capital bourse extended its losing streak for two consecutive weeks as cautious investors preferred profit-booking and reducing their capital market exposure owing to the prevailing concerns regarding the market outlook amid the fear of a resurgence of political movements in the country’.

The market experienced volatility, with investors being active on both sides of the trading fence, as risk-averse investors continued their selling spree in order to safeguard their funds from the ailing market, while consecutive corrections created lucrative investment opportunities for bargain hunters who sought quick-gain opportunities in selective issues, it added.

The daily average turnover on the DSE decreased to Tk 592.77 crore in the past week from that of Tk 651.33 crore in the previous week.

Fu Wang Food Ltd topped the weekly turnover chart with a value of Tk 140.98 crore.

Sea Pearl Beach Resort and Spa Limited, JMI Hospital Requisite Manufacturing Limited, Bangladesh Shipping Corporation, Delta Life Insurance Co Ltd, Khan Brothers PP Woven Bag Industries Limited, Continental Insurance Ltd, Metro Spinning Ltd, Emerald Oil Industries Limited and Crystal Insurance Company Limited were the other turnover leaders.

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