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Bangladesh - Corporate - Management - March 20, 2024

Millions of investors have lost capital

Securities market lost confidence

Mahfuz Emran : Disaster is going on in the stock market. The market has come down to the bottom. Millions of investors have lost everything. In the last 7 working days, the price of Dhaka Stock Exchange (DSE) has decreased by 300 points and the market capitalization has decreased by Tk 61 thousand crores. And on Tuesday, the index fell by 84 points in one day. The index is currently at a 3-year low. However, some new companies have joined the market during the period under discussion. If these are excluded, the condition of the index is even worse. As a result, panic has spread throughout the market. Companies are doing forced sales (mandatory share sales) to protect themselves from the fall. The pressure to sell shares is increasing. There are no signs of improvement. But even in the recession, the share prices of some weak companies are rising.
Analysts say that this situation has arisen in the market due to increase in the interest rate of deposits of the bank sector, forced sale of various merchant banks and brokerage houses and adjustment of prices of large companies after distribution of dividends.
Economist Professor Abu Ahmed told Daily Industry that the interest rate in the banking sector has increased. Currently, the interest rate on deposits is 11.5 percent. It is again risk free. Because of this, money is going from the stock market to the bank. Besides, various organizations are doing forced sales. On the other hand, the major player in the market is the government investment company ICB. They had invested earlier by bringing money from various institutions. Now these money have to be returned. As a result, they are returning money by selling shares. All these things have put pressure on the market. Everyone in the market is affected by this.
In last 7 working days DSE price has decreased by 300 points. During this time the market capital lost Tk 61 thousand crores. In the last two days, the index fell by 153 points and the market capitalization fell by Tk 12,000 crore. As a result, panic has spread in the market. As a single day, 16.13 lakh shares of 396 companies were traded on DSE on Tuesday. The total value of which is Tk 465.54 crore. Among them, the share price of 41 companies has increased, 319 have decreased and the share price of 36 companies has remained unchanged. DSE’s broad index fell by 84 points to 5,814 points from the previous day. The index is at a 3-year low. However, some new companies have been added. Excluding them, the index falls to a 5-year low. Meanwhile, the DS-30 index fell by 22 points to 2,020 points on Tuesday. The DSE Shariah index fell by 17 points to 1,258 points. DSE’s market capitalization has come down to Tk 6 lakh 87 thousand crore from the previous day.
Former President of Bangladesh Merchant Bankers Association (BMBA) Saydur Rahman told that the big problem in this market is that the number of long-term investors is less. Everyone wants to gain short term. That’s why you want to sell shares and get out if the market increases a little. He said, the way the index is currently falling in the market, it was expected. Everyone thought there would be a shock if the floor price (floor) was lifted. But it did not come immediately but came a little later. Besides, the companies that play a major role in the index, after the dividend distribution, the price of that company is adjusting. It affects the market. Hopefully, within a day or two, the market will recover at its own pace.
Top ten companies: The biggest losers on DSE on Tuesday were Asiatic Laboratories, Fu-Wang Ceramics, Golden Son, Central Pharma, Renetta, Best Holdings, SS Steel, Lafarge Holcim, British-American Tobacco and Toufika Food. The companies whose share prices have increased on this day are Central Pharma, Daffodil Computer, Munnu Fabrics, Fu-Wang Ceramic, Anlima Yarn, Rupali Life Insurance, Sonali Ansh Industries, Sonar Bangla Insurance, First Bangladesh Fixed Income Fund and City General Insurance. On the other hand, the companies whose share prices fell more are People’s Leasing, Robi Axiata, Khulna Printing, Delta Life Insurance, Tamizuddin Textile, Golden Son, Osmania Glass, BBS Cable, Orion Infusion and Golden Harvest.

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