Stock market hits newer lows
Investors did not have to wait for the next week to see the market slide further to a level that was lowest in the last 41 months
With each passing day, the stock market is hitting a new milestone in its downward plunge.
In the first week of this month, Dhaka Stock Exchange's broad-based index DSEX was consolidating around a level of 4,700, - a 37-month low.
The second week of the month started with a 1.6 percent fall on December 8. And overnight, the market came down to a level below 4,600, which was a 39-month low.
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Investors did not have to wait for the next week to see the market slide further to a level that was lowest in the last 41 months. In just another two trading days, the market came down to a level of 4,500 on December 10.
Amid hopes of coming government support, the market saw a halt in decline in the three working days preceding Victory Day.
But with no rescue in sight, the DSEX took only one working day to slide to the next landmark of 4,400.
The 1.75 percent fall on Tuesday clearly pushed the market to its lowest position since June 2016, a 42-month low.
"Can anyone please halt the trading in the stock market? The ongoing capital erosion is unbearable", an anguished trader was heard saying during the trade hour.
"Investors had been trying out some risk management strategies and a re-balancing of their portfolios. But as nothing is helping them most of them are in hibernation until they are called for margin adjustments," the trader added.
He said that almost no one is coming back with fresh equity as few investors are capable now of injecting fresh capital in their investment accounts.
Market till Tuesday
Tuesday morning witnessed a moderately bearish session as indices were nearly flat over the first half an hour. But beginning at 11.00 am, indices nosedived and showed no upward movement till the end.
The DSEX, losing over 78 points or 1.75, came down to 4,419.
In December alone the index fell 6.6 percent, with a total market capital of nearly Tk19 thousand crore getting wiped out within 12 only working days.
The fall to date in 2019 is almost 18 percent, with eroded market capital of over TK 53thousand crore.
From the year's market peak in the last week of January the market has slumped to over one-fourth, wiping out investors' total unrealized capital of around Tk83.5 thousand crore.
Amid the panic at the DSE, only 35 scrips gained, while 278 lost and prices of 40 securities were unchanged.
With investors' low participation, trading at the DSE came down to Tk281.5 crore, 8.15 percent down from the previous session.
Government attention needed
Market stakeholders feel the need for government intervention as the market mechanism is not helping stop investors' capital erosion.
Mohammad Ali, Chief Executive of Dhaka Bank Securities and a director at the DSE Brokers Association, told The Business Standard that he was frustrated over the government's indifference to the bleeding in the stock market.
"Any market is subject to government intervention if it turns too adverse, all over the world. But here it is absent nowadays and that is another reason why the market is going down so sharply without reason," Ali complained.
"However we, the intermediaries, have sought a soft loan from the central bank and hope the finance ministry will take positive action to suggest to the central bank that it act accordingly and soon," he said, adding, "that will help the market to halt the fall."
Besides soft loans and monetary measures, Ali demanded a more holistic government attention to the capital market, as between one and two million families are directly or indirectly impacted by conditions in the stock market.
The intermediary industries too employ thousands of educated people and with the market in such a bad shape, their families too suffer financially, he said.
