The general index of Dhaka Stock Exchange slid again on Tuesday, a day after it was pulled up by some institutional investors, in volatile trading as some investors went for late sell-offs because of uncertainty over the market behaviour and the regulators filing cases against stock manipulators.
The benchmark general index of Dhaka bourse, the DGEN, on Tuesday lost 46.12 points, or 0.74 per cent, to close at 6,177.81 points, while on Tuesday it had gained 103 points.
The DGEN lost 533 points in the latest spell of bear run that started on July 24.
Market operators claimed that most investors continued to remain cautious and some went for panic-driven sell-offs on Tuesday.
The turnover was Tk 501.61 crore, slightly up from Monday's turnover of Tk 495 crore, but significantly lower than the average turnover of Tk 1,810 crore in the last week of July.
They said that the Anti Corruption Commission on Tuesday announced that it would file case against four people including an executive director of SEC for market manipulation during the January's stock market crash.
'Investors are also waiting to see what steps the SEC takes in filing cases against other market manipulators and the impact of the case on the market before going for fresh investment,' said an operator.
They said that institutional investors, especially merchant banks, remained inactive on the day, a trend that continued over the last one and a half weeks, as the Securities and Exchange Commission recently took a hard line stand against them.
'As the SEC is creating pressure on the merchant banks for breaking down the controversial omnibus accounts and fined some top merchant banks for disbursing excessive margin loans, they might have become inactive,' said a senior SEC official.
The SEC on Monday sat with Bangladesh Merchant Bankers Association and asked them to become more responsible and act according to the market need.
Market operators said in the last few days trading on the bourse was not rational. They also said the panic-driven attitude of the inventors might help a syndicate in executing their vested interest.
The latest bear run began at the end of July starting with a market correction following the government decision to offload more shares of the state-owned enterprises in the market.
Poor corporate disclosures made by a number of listed companies and the tight monetary policy adopted by the Bangladesh Bank also prompted the fall ofthe market at that time.
The situation worsened after the announcement made by the SEC that it would take legal actions against market manipulators also triggered a rumour of large-scale disinvestment by the big fishes.
Akter H Sannamat, a capital market analyst, said, 'The market is facing a liquidity crisis again as the large-scale investors remained in the sideline.'
He said that the downtrend in the market might be seasonal due to the Ramadan as many investors might have sold shares as they needed more cash.
'But the fluctuation in the last few days is not acceptable,' he said.
On Tuesday, all the major sectors including banks, non-bank financial institutions, insurance, telecommunication and fuel and power declined sharply.
Trading on the DSE started with a rollercoaster ride on Tuesday as the general index fluctuated heavily in the opening hour. From the mid-session the DGEN started crawling down and ended the day in a negative territory.
Of the 250 issues traded on Tuesday, 35 advanced, 205 declined, and 10 remained unchanged.
Source : New Age
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