Morgan Stanley worried about Bangladeshi stock market, DSEX dips 0.4%
Dhaka stock indices took a beating on Sunday, the first trading day after Morgan Stanley Capital International (MSCI) – a renowned global investment research firm – expressed concerns about the Bangladeshi stock market in a report published on 9 February.
DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), plunged by 27 points or 0.4% to 6,256, compared to the previous trading session on last Thursday – the day MSCI's report was published.
Shariah index DSES and blue-chip index DS30 also fell by 0.4% each to 1,366 and 2,225 respectively.
Overall investor participation also nosedived, and the daily turnover at the Dhaka bourse dropped by 23% to Tk470.8 crore on Sunday.
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The bourse witnessed a significant decrease in buyers, and on the day, only 11 scrips advanced, 164 declined and 146 stayed the same.
Pharmaceutical stocks contributed the highest 15.9% to the day's total turnover, followed by IT adding 12.9%, and food 11.5%.
Almost all the sectors displayed dismal returns, where travel faced the highest correction of prices and lost 4% in the process at the end of the day. Services sector fell by 3.7%, and IT by 3.3%.
On the other hand, paper stocks gained 0.5% market capitalisation – the only sector to exhibit a positive return on Sunday.
According to the daily market commentary of EBL Securities, the market has been already wading through choppy trading in the past few sessions, induced by dismal earning disclosures by most of the listed firms.
"Then the MSCI expressing concerns about the liquidity situation of the country's stock market added to the woes of already shaky investors."
Consequently, investors opted for protecting their funds from the ailing stock market by offloading their holdings, the commentary added.
What MSCI said in its report
In its latest quarterly review, the MSCI said owing to the "deterioration of liquidity" in the Bangladeshi stock market, the research firm wouldn't incorporate any of its forecasts about the market while measuring the MSCI frontier markets index.
The MSCI provides investors with data and analytics to help them make investment decisions. It is well known for benchmark indices, such as MSCI emerging markets index and MSCI frontier markets index.
It also mentioned giving Bangladesh "special treatment" based on feedback from market participants against the backdrop of the imposed floor price. The price movement restriction is not letting stocks fall after a certain level, thus making the shares illiquid in absence of buyers.
