Express (September 09, 2011)
Dhaka stocks returned to negative territory again Thursday, a day after moderate gain, with turnover declined to seven and a half-month low as liquidity crisis continued in the stock market.
The lack of confidence and lower participation of institutional investors dragged down the market as turnover value failed to cross even Tk 2.5 billion, said a stock broker.
Amid lower participation of small and institutional investors, total turnover value declined to Tk 2.41 billion since January 25 when turnover value was Tk 2.06 billion.
The market witnessed choppy trading for the first three hours as the index moved along with hardly any volatility. The last hour it witnessed some aggressive sell-off and finally closed 18 points lower.
The benchmark General Index of the DSE, the main gauge of the market, went down by 18.22 points or 0.29 per cent to close at 6,077.31.
The broader All Shares Price Index (DSI) shed 12.95 points or 0.25 per cent to close at 5,088.41. The DSE-20 Index comprising blue-chip shares also lost 2.03 points or 0.04 per cent to close at 4,144.51.
The investors are suffering from lack of confidence following the dearth of ongoing liquidity in the market as turnover is very low amid thin participation of investors," said a stock broker.
"The majority of investors are watching the movement of the market while big and institutional investors remain inactive, which contributed to the lower turnover," he said.
"Stalemate continued in bourse and poorest turnover and volume reflected acute dearth of liquidity in the market," said LankaBangla Securities in its daily market analysis.
"To break the stalemate, regulator gave stock split stimulus to spur the market activities before Eid vacation but the split recipe was largely outshone by the cautionary move of investors after the central bank's policy interest rates hike apart from other factors," it said.
Tightening monetary policy tools have already made the short term borrowing more expensive for the banks and financial institutions, it said.
Investors who have been waiting to participate are now skeptical of taking fresh exposure in the market amid very poor activities, it added.
"Despite news regarding the Dhaka Stock Exchange's (DSE) initiative to sit with top brokers on coming Sunday to discuss about the declining turnover, market was unable to stage any rally after previous day's uptrend where ICB reportedly provided support to the market," a market insider said.
The DSE will hold a meeting with the top 30 brokerage houses to discuss the overall market situation and find out the way how the market will stablise.
Share price of all the major sectors declined except cement sector as the market witnessed selling pressure all across the board.
Cement sector was the best performing sector of the day gaining 0.83 per cent as share price of heavyweight Lafarge Surma Cement rise following the news of their right offer.
Banking sector lost 0.2 per cent whereas NBFIs, insurance, and fuel and power sector declined by 0.5 per cent, 0.8 per cent and 0.3 per cent respectively.
Most of the share price traded on the day declined. Out of 251 issues traded, only 80 advanced, 156 declined while 15 remained unchanged.
A total of only 24.36 million shares changed hands on the day against 35.89 million in the previous session. The trade deals also declined to 64,584 against Wednesday's 75,574.
Total market capitalisation of the DSE, declined to Tk 2,899.63 billion against Tk 2,906.74 billion in the previous session.
Lafarge Surma Cement also topped the turnover list with shares worth Tk 218.02 million changing hands.
The other turnover leaders were Titas Gas, UCBL, Beximco Ltd, Jamuna Oil, National Bank Ltd, Square Pharma, Grameenphone, One Bank Ltd and CMC Kamal.
Legacy Footwear was the day's highest gainer posting a rise of 9.92 per cent.
It was followed by ICB AMCL Islamic Mutual Fund, Monno Stafflers, MBL First Mutual Fund, Anlima Yarn, BD Auto Cars, Libra Infusion, Reliance Insurance, Sixth ICB and Standard Ceramics.
The day's worst losers included Seventh ICB, Progressive Life Insurance, Dulamia Cotton, Green Delta Life Insurance, Meghna Condensed Milk, Global Insurance, Bangas Ltd, Meghna Petroleum, Fu-Wang Foods and Apex Foods.
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