Stocks back in the red as taka devalue further

After a one-day rally, stocks have slipped into the red zone again as the central bank further devalued the taka against the US dollar which has extended investors' worries about inflation.

On Tuesday, the benchmark index DSEX of the Dhaka Stock Exchange (DSE) lost 0.79% to close at 6,211 points and the blue-chip index was also down by 14 points to 2,295.

The port city bourse Chittagong Stock Exchange's all share price index (CASPI) fell more than 100 points to close at 18,282.

The Bangladesh Bank on Monday depreciated the taka by Tk0.40 re-fixing the local currency's exchange rate against the US dollar at Tk87.90 in a bid to stabilise the volatile forex market. This is the third depreciation of the local currency against the greenback this month.

The broad index of the premier bourse earlier lost more than 550 points in the last eight days till Sunday due to the volatile exchange rate and increasing commodities prices.

To stop the sharp fall of indices, Finance Minister AHM Mustafa Kamal held a meeting with the central bank Governor Fazle Kabir on Sunday. In the meeting, the finance minister asked regulators to boost investment in the stock market.

To attract capital to the market, Mustafa Kamal asked the central bank to keep the banks' loans to the Investment Corporation of Bangladesh outside the exposure limit of the banks in the capital market.

Besides, the Bangladesh Securities and Exchange Commission (BSEC) also said stockbrokers and merchant banks can provide margin loans up to 100% of their client equity to buy stocks with borrowed money, up from 80%.

The two in conjunction helped investors breathe as it reduced selling pressure in the market on Monday.

EBL Securities said in its daily market review, that stocks on the Dhaka bourse plunged after a single-day break as the confidence of investors is yet to recover as uncertainties persist due to the un-abating Russia-Ukraine war and volatile commodity prices globally.

The review added that the Dhaka market opened higher and the key index added 44 points within the first hour of trading, however, the market declined steadily during the rest of the session due to prevalent selling pressure.

The DSE observed the turnover increased 3% over the period from the previous session and stood at Tk660 crore.

During the session, 376 companies' shares were traded, wherein 55 advanced, 278 declined and 43 remained unchanged on the DSE.

On Tuesday, the pharmaceuticals sector contributed the highest turnover of 15% of the DSE's total turnover, followed by the miscellaneous and bank sectors.

Beximco Limited dominated the scrips-wise turnover board, which was followed by Fortune Shoes and JMI Hospital.

Investors got some returns only from the paper sector, where the rest of the sectors witnessed a sharp fall on the country's premier bourse.

Silco Pharma was in the top position in the gainer list where its share prices jumped 6.85%, which was followed by Silva Pharma and Delta Life Insurance.

Besides, Sonali Paper was the worst share on the Dhaka bourse as their share prices dropped 27% due to the right share adjustment.