DSE market cap drops Tk58,000cr in eight days
Stockbrokers say too many negative triggers collectively hurting stock bulls
The market capitalisation of the Dhaka Stock Exchange (DSE) dropped by Tk58,000 crore to settle at Tk6.53 lakh crore in the last eight straight days, as the major index continued to decline amidst a severe confidence crisis among investors.
The DSEX, benchmark index of the Dhaka bourse, plunged by 58 points to settle at 5,312 yesterday, marking its lowest level since April 2021. The downfall extended the losing streak to eight straight days, while the DSEX lost a total of 384 points.
According to the Central Depository of Bangladesh, around 5,000 beneficiary owners (BO) accounts were emptied during the sessions.
Stockbrokers and market experts said too many negative triggers – rising interest rates, fears of taxes on individual investors' capital gains from listed securities, subdued corporate earnings, and a serious confidence crisis due to the regulator's intervention – are collectively hurting stock bulls.
EBL Securities in its daily market review said the depressed capital market continued its downturn, with the benchmark index of the Dhaka bourse falling into the red for eight consecutive sessions as persistent pessimism and wavering confidence led investors to shy away from taking positions in equities while losses continued to mount on their portfolios.
The time is tough right now for stock investors, said a DSE stock brokers association leader, adding that the recent regulatory intervention by limiting the daily downward price limit to 3%, down from 10%, has also disrupted the market rhythm.
"Sellers maintained their dominance across the trading floor as unnerved investors sought to minimise further losses, while the majority of scrips turned into falling knives and kept on being stuck at the revised lower circuit without having sufficient buyers," said EBL Securities.
Abu Ahmed, former professor of economics at the University of Dhaka, blamed lack of good governance, listing of weaker firms for the last one and a half decades, insider trading, market manipulation, and frequent unconventional regulatory interventions in trading as significant factors that have hurt the market's most significant element – trust.