Stocks slide for third day amid low turnover on DSE

Stocks slide for third day amid low turnover on DSE

FE Report

Stocks closed lower Tuesday for the third session in a row with falling turnover value as worried investors went on selling frenzy, fearing further fall. Analysts said most of the investors remained cautious as the government is yet to extend the banks' capital market exposure adjustment deadline, which is scheduled to expire in July 2016, while some were nervous ahead of earning declaration season. 

The market opened higher for a brief period, gaining around 11 points within first 30 minutes of trading, but started to dive till closure of the session on intense selling pressure. At the end of the session, DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), finished at 4,357.63, slumping 33.78 points or 0.76 per cent over the previous day. "The market ended red following sell pressure amid lower investor confidence," said Asian Tiger Capital Partners, an asset management company, in its regular market analysis. 

LankaBangla Securities, a stockbroker, a stockbroker, said, "The benchmark index has slid into negative territory, adding to the losses posted in the two previous sessions". "Investors buying appetite became subdued as market has shown no sign of recovery yet ahead of earning declaration season," said the stockbroker. "Gloomy market scenario as well as shaky investors' confidence has triggered the daylong selling frenzy in the capital market," said International Leasing Securities, a stockbroker, in an analysis. Besides, delay in the announcement of time extension of banks' capital market exposure adjustment and watchfulness for the forthcoming national budget for the FY 2016-17 has kept a major part of the investors inactive in the market, said the stockbroker. "Investors are yet to get any favorable indication of the forthcoming market outlook, which created jitteriness," said the stockbroker. 

Zenith Investments, an asset management company, said, "Index experienced a huge downfall which weakened the market to a great extent. Turnover dried up more to let the support zones disappear gradually". The Zenith analysis noted that majority of the stocks faced heavy correction leading the bourse downward, while cautious participation of investors also had its contribution to the day's fall.

 The two other indices also ended in the red territory. The DS30 index, comprising blue chips, dropped 10.47 points or 0.62 per cent to settle at 1,662.39. The DSE Shariah Index (DSES) lost 6.95 points or 0.65 per cent to close at 1,055.97. Trading activities also came down to Tk 3.40 billion, which was 20 per cent lower than the previous day's Tk 4.25 billion. 

The investors' attention was mostly focused on pharma, power and engineering - the sectors that accounted for 25 per cent, 19 per cent and 12 per cent of the day's total turnover. The large-cap sectors posted negative return except telecommunication and pharmaceuticals, which gained 0.66 per cent and 0.01 per cent respectively. 

Fuel and power was the biggest lower, losing 1.32 per cent, followed by engineering 1.27 per cent and NBFIs 0.87 per cent. Banks and food and allied sectors also declined 0.76 per cent and 0.18 per cent respectively. 

The port city bourse Chittagong Stock Exchange (CSE) also ended lower for the third day, with its Selective Categories Index, CSCX, plunging by 69.15 points to 8,142.36 points. Losers beat gainers as 156 issues closed lower, 50 closed higher and 36 remained unchanged on the CSE. The port city bourse traded 7.22 million shares and mutual fund units worth nearly Tk 213 million in turnover. 

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