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Stocks see eventful week as regulator steps in

| Updated: March 15, 2022 09:49:11


Stocks see eventful week as regulator steps in

Stocks witnessed an eventful week to March 10, featuring the biggest single-day fall in almost two years as well as the highest single-day rise in 14 months.

Of the five trading days this week, the first two sessions saw the benchmark index lose 240 points due to panic-driven sell-off. It, however, recovered 212 points in the last three days riding on the regulatory measures imposed to halt the free-fall of stocks nervous investors rushed to dump the shares amid panic caused by the ongoing war between Russia and Ukraine.

Week on week, DSEX, the prime index of Dhaka Stock Exchange (DSE), shed 28.37 points or 0.42 per cent to settle at 6,668, extending the losing streak for the fourth straight week. The DSEX eroded nearly 418 points in the past four weeks.

The market suffered a loss of 182 points on Monday, the highest single-day fall in almost two years amid panic sell-off.

The DSEX lost a total of 492 points in eight sessions until March 7 since the Ukraine-Russia war crisis emerged on February 24, which prompted the stock market regulator to impose a temporary circuit breaker.

On Tuesday, the Bangladesh Securities and Exchange Commission (BSEC) reduced the lower circuit to 2.0 per cent from 10 per cent, effective from Wednesday, to stop the free-fall of stocks.

Upper limit of the circuit breaker, however, remained unchanged at 10 per cent.

Following the regulatory intervention, the index jumped 156 points on Wednesday, the biggest single-day gain in 14 months.

The investors regained confidence following the latest regulatory intervention, but the gains could not completely offset the heavy losses, according to a leading merchant banker.

Market analysts said regulatory steps to stop the recent free-fall of stocks led to a buy pressure in the last three days of the week.

The market kept its positive momentum as the regulatory intervention provided much-needed relief, pushing the core index to close higher in the later part of the week, said a leading broker.

The regulatory move encouraged banks which have invested below the 25 per cent threshold, to increase stock market exposure and form special funds for investing in the capital market, said the stockbroker.

Stocks rebounded at the later part of the week after the stock market regulator moved to impose the lower circuit at 2.0 per cent which has driven the investors to invest new funds in the market, commented EBL Securities.

However, global price instabilities due to the ongoing Russia-Ukraine conflict remain a concern over the future macroeconomic scenario of Bangladesh, said the stockbroker.

This week, the investors were mostly active in the textile sector, which captured 13.3 per cent of the week's total turnover.

Two other DSE indices also ended lower. The DS30 index, comprising blue chips, dropped 37.84 points to finish at 2,425 and the DSE Shariah Index (DSES) lost 6.59 points to close at 1,435.

The week's total turnover stood at Tk 39.72 billion on the prime bourse which was Tk 37.46 billion in the week before.

The daily turnover averaged out at Tk 7.94 billion on the country's premier bourse, which was 6.04 per cent higher than the previous week's average of Tk 7.49 billion.

Market capitalisation of the DSE also fell slightly to Tk 5,384 billion on Thursday, from Tk 5,351 billion in the week before.

Major sectors posted mixed performances with the IT sector posting the highest gain of 7.5 per cent, followed by textile (2.4 per cent), engineering (1.20 per cent), banking (0.4 per cent) and non-bank financial institutions (0.10 per cent).

On the other hand, food, cement, telecom and power sector lost 2.6 per cent, 1.9 per cent, 1.0 per cent and 0.4 per cent respectively.

Of the 386 issues traded, 207 advanced, 156 declined and 23 issues remained unchanged on the DSE trading floor.

Beximco was the most traded stock with shares worth Tk 2.62 billion changing hands, followed by Fortune Shoes, Bangladesh Shipping Corporation, British American Tobacco and Orion Pharma.

BDCOM Online was the top gainer, posting a 41.74 per cent gain, while Vanguard AML Rupali Bank Balanced Fund was the worst loser, shedding 15.48 per cent.

The Chittagong Stock Exchange (CSE) also edged lower, with the CSE All Share Price Index (CASPI) losing 11 points to settle at 19,561 while its Selective Categories Index (CSCX) shedding 9.0 points to close the week at 11,737.

Of the issues traded, 201 advanced, 116 declined and 21 remained unchanged on the CSE trading floor.

The port city's bourse traded 52.01 million shares and mutual fund units with turnover value of Tk 1.13 billion.

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