Selloffs drag DSEX to 13-week low
Amid increasing selling pressure, DSEX – the broad-based index of the Dhaka Stock Exchange (DSE) – fell by 0.81% to 6,253 points on Monday – the lowest since 21 August.
Macroeconomic uncertainties engulfed investors' minds as soon as the corporate earnings appeared to be deteriorating in the July-September quarter of the ongoing fiscal, said analysts.
"Dhaka stocks logged extreme hurdles for the second day in a row this week as dismal corporate earnings for the second consecutive quarter have prompted investors to offload their holdings and remain on the sidelines," EBL Securities wrote in its daily market commentary on Monday.
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Quarterly profits of most firms have declined year-on-year owing to inflation, the energy crisis, and deteriorating exchange rates.
In continuation of the previous session's selloff, the market nosedived at the opening of Monday's trade, and beating several short advances the rest of the day, the indices finally closed much lower.
Meanwhile, the floor price mechanism, imposed at the end of July this year, has turned into the most loved and hated factor among investors.
As the prices are not being allowed to go down despite seeing no buyer for around three-fourths of the DSE scrips, it is making life painful for those who need cash or who are waiting for stocks to be corrected in line with the fundamentals.
On the other hand, a majority of individual investors are thanking the price floor that is artificially protecting their capital, which is why any rumour regarding the removal of the floor tends to ignite a selloff.
Bangladesh Securities and Exchange Commission (BSEC) Chairman Professor Shibli Rubayat-Ul-Islam on Monday evening told The Business Standard, "We are tired of reassuring the protection."
The regulator has no plan to remove the price floor as long as it protects small investors, he said.
Daily turnover in the DSE slightly declined to Tk714 crore on Monday, from Tk724 crore on the previous day.
With the government decision to go back to the previous banking hour following its energy-saving moves a few months ago, the DSE trading is going to start at 10am and close at 2:20pm from Tuesday, instead of opening at 9:30am and closing at 1:50pm.
