Investors exiting stock market

Panic increased as circuit breaker limits reduced

Mahfuja Mukul: Extremely volatile stock market. The share prices of various companies are decreasing every day. In the last one week, the price of Dhaka Stock Exchange (DSE) has decreased by 168 points. The price limit (circuit breaker) was changed again on Wednesday to stop the fall. According to the new decision, the share price of any listed company cannot fall by more than 3 percent in a day. It became effective from Thursday. But it has increased panic in the market. As a result, the index fell by another 60 points on Thursday. Overall, stock market conditions are worse than at any time in the past. Domestic and foreign investors are leaving the market. As a result, the stock market is the fear of investors. However, the regulatory body Bangladesh Securities and Exchange Commission (BSEC) says the market will run at its own pace.
When asked, Executive Director of BSEC Mohammad Rezaul Karim told on Thursday that some unusual transactions in the market have come to the attention of the commission. After that the limit of circuit breaker (the limit of price drop in one day) is reduced to the lower level. Now the market will run at its own pace. The commission will not interfere in any way.
However, if anyone violates the law, action will be taken according to the law after investigation.
It is known that there is a negative situation in the market even before the national elections. Thousands of domestic and foreign investors have already left the stock market. Most of them have lost capital and become destitute. And for this negative condition of the market, different excuses are shown one by one. Sometimes the negative state of the country’s macroeconomics, sometimes the world economy, political situation, Ukraine-Russia war and the increase in bank interest are among them. The latest war between Iran and Israel has been added to this list. But even though these two countries in the Middle East are facing a war, it has not affected the stock market of any country. The stock markets of both Iran and Israel are normal. According to economists and market participants, there are two crises in the market. The crisis on the demand side is the crisis of investor confidence in this market. The supply side problem is that there are fewer good companies. The result is a win-win situation for manipulation and syndicates. Added to this are various weaknesses in regulatory bodies.
If you want to know, the former caretaker government’s financial adviser AB Mirza Azizul Islam told that the main problem of the market is the lack of confidence of investors. This crisis has been going on for a long time. Added to this are various economic crises, international situations and national politics. As a result, first of all steps should be taken to eliminate the crisis of confidence. In this case, trust should be ensured by establishing good governance. That is, the investors have to give this assurance, if someone steals their money through manipulation, they will be prosecuted. Besides, the supply of good shares should be increased. But the task is not very easy.
Meanwhile, the unusual situation of the stock market has been going on for a long time. Decreasing value. The commission feels that a circle is working on this systematically. The transaction price limit has been changed again. According to the new decision, the share price of any listed company can’t fall by more than 3 percent in a day. But it can increase up to 10 percent. Earlier this limit was also 10 percent for reduction. This decision is effective from Thursday. But the market did not take it well. There was a big price drop in the market that day. As a single day, 13.84 million shares of 396 companies were traded on DSE on Thursday. The total value of which is Tk 511 crore 43 lakh. Among them, the share price of 69 companies increased, 300 decreased and the share price of 27 companies remained unchanged. DSE’s broad index fell by 60 points to 5,518 points from the previous day. The DSE-30 index fell by 10 points to 1,974 points. The DSE Shariah Index fell 12 points to 1,217 points. DSE’s market capitalization has come down to Tk 699,000 crore from the previous day.
Top 10 Companies: The top 10 companies traded on DSE on Thursday were Orion Infusion, Taufika Foods, ITC, Kohinoor Chemical, Asiatic Laboratories, Prime Finance First Mutual Fund, Malek Spinning, Pharma Aids, Beach Hatchery and Best Holdings. Companies whose share prices have increased on DSE on Thursday are ADN Telecom, United Finance, MB Pharma, Sonali Ansh Industries, Kohinoor Chemical, Libra Infusion, Prime Finance First Mutual Fund, ITC, GQ Ballpen and Premier Cement. On the other hand, the companies whose share prices have decreased are Bata Suz, Reneta, UPGDCL, Nettle Insurance, Senar Bangla Insurance, Advent Pharma, Dominage Steel, Prime Insurance, Trust Islami Life Insurance and Aftab Automobile.