Market to open with sharp losses from last week
The market took a beating during the week, thanks to the falling share prices of large-cap sectors, mainly banks and telecom
Bourses ended a gloomy week on Thursday with losses in all five sessions amid investors' lack of confidence on large-cap shares.
DSEX, the key index of the Dhaka Stock Exchange, plunged 253 points or 5.3 percent during the week to close at 4,480.
CASPI, the benchmark index of the Chittagong Stock Exchange, lost 782 points or 5.4 percent over the week to close at 13,743.
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The market took a beating during the week, thanks to the falling share prices of large-cap sectors, mainly banks and telecom.
On February 23, the share price of Grameenphone increased by Tk24 or 7.4 percent as the company had disclosed news on paying Tk1,000 crore to the telecom regulator.
However, this price hike did not sustain in the following sessions, because the Appellate Division ordered Grameenphone to pay the remaining Tk1,000 crore in 90 days, out of its previous order to pay Tk2,000 crore.
Moreover, the telecom regulator, BTRC, declared that its restrictions on Grameenphone's business operations will continue until the case pending in the lower court for the audit claim is settled.
As a result, the telecom service provider witnessed price corrections throughout the week and lost 7.2 percent of its share price.
The banking sector also faced havoc on Bangladesh Bank's directive to set a maximum 9 percent interest rate on all loans but credit cards from April 1, 2020.
Investors feared that this implementation of a single-digit lending rate will bring down the profitability of banks in the near future, and hence kept on selling off their holdings from the sector.
Also, analysts said that this capping of the lending rate is likely to slow down the credit flow to the private sector and hence the capital market and the economy.
Additionally, the reluctance to form a special fund even two weeks after the central bank's declaration of doing so also seemed to make the investors skeptical about a quick market recovery, said the Weekly Market Review of EBL Securities Ltd.
The finance minister's announcement of reversing the postal saving scheme's interest rate from 6 percent to its previous level of 11.28 percent has also affected the market adversely.
Trading activities remained low during the week, and the average turnover stood at Tk617.5 crore, 6.4 percent down from the previous week's Tk659.3 crore.
In the weekly average turnover distribution, the pharmaceuticals sector contributed the highest 17.9 percent to turnover, followed by textiles adding 16.1 percent and engineering adding 14.5 percent.
All the sectors posted weekly losses with jute facing the highest price slide of 12.4 percent over the week.
Among the large-cap sectors, banks lost 7.5 percent, telecom lost 7.1 percent, financial institutions gave up 4.7 percent and pharmaceuticals slid 3.1 percent in the weekly sector return board.
Grameenphone was the most traded stock of the week with a closing price of Tk274.4 per share. Its weekly turnover was Tk115.7 crore, according to the DSE website.
Central Pharmaceuticals Ltd topped the weekly gainers' table by gaining 39.4 percent, closing at Tk13.8 per share. Prime Insurance Company Ltd, on the other hand, was the week's worst loser by dropping 25.1 percent and closing at Tk19.4 per share.
