DSE index drops 2.73%, market cap declines Tk12,300cr last week
The Dhaka Stock Exchange's (DSE) key index declined by 2.73% last week, with market capitalisation shedding approximately Tk12,300 crore, as investor confidence remained dampened amid ongoing economic uncertainty.
DSEX, the benchmark index of the DSE, plummeted by 2.73% or 143.38 points to close at 5,114, while the blue-chip index DS30 slipped 51 points or 2.65% to settle at 1,879 last week.
Among the traded issues, only 63 advanced, while 306 declined and 27 remained unchanged during the week.
Investor participation edged up slightly compared to the previous week but remained low, hovering around Tk300 crore over the past several weeks.
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The market capitalisation of the DSE dropped by 1.84% to close at Tk6.56 lakh crore during the last week.
EBL Securities said in its weekly market review that the benchmark index of the capital bourse plunged further this week to extend its prolonged losing streak as investors' pessimistic sentiment regarding the market momentum continued to dominate across the trading floor.
Despite ongoing regulatory meetings with different stakeholders to improve investors' confidence, the recent policy rate hike to 10% by the central bank and political uncertainty further aggravated investors' bearish market sentiment and ignited the selling spree to persist for another week, it added.
On Tuesday, the Bangladesh Bank raised its policy rate once again in less than a month, pushing it to 10% to further make borrowing more expensive in an effort to tame high inflation.
This marks the fifth hike this year and the 11th since May 2022, when the policy rate was at 5%. Earlier on September 24, it rose to 9.5% from 9%.
Market insiders indicated that the policy rate hike is likely to drive deposit rates higher, encouraging investors to favour fixed deposits over investments in the capital market. Additionally, rising yields in government securities have further drained liquidity from the capital market.
A senior analyst of a brokerage firm told The Business Standard that the 50 basis-point policy rate hike, coupled with the increase in short-term bill rates last week, should impact money market liquidity. Consequently, the equity market is expected to be negatively affected. Furthermore, as the earnings season begins, investors are anticipating subdued earnings in this quarter, which is also impacting the market.
On the sectoral front, banking sector stocks accounted for the highest turnover at 22.7%, followed by pharmaceuticals at 16% and the food sector at 11.2%.
All sectors displayed dismal returns, with paper, life insurance, and IT experiencing the most negative returns on the bourse.
Ifad Autos led the gainers list, with its share price surging 24.09%, followed by United Finance and Runner Auto.
On the other hand, Newline Clothing was the top loser, with its share price dropping 25.93%, followed by Pragati Life Insurance and Padma Life Insurance.
