Political jitters sink stocks

Tk 6,134cr vanishes in seven days

The stock market is feeling the pinch of rising political tension centring the upcoming parliamentary election, stakeholders and investors said yesterday. They apprehend that if the fear intensifies, the market indicators would fall further and burn down investors' money. The benchmark index of the Dhaka Stock Exchange, DSEX, has been falling for seven consecutive days. It dented investors' confidence and was well-reflected in the turnover.

Turnover came down to a nine-month low of Tk 314 crore, down 37 percent from that of the previous day. On March 27, the turnover stood at Tk 311 crore.

The market lost nearly Tk 6,134 crore, or 1.60 percent, of its value, in the last seven working days.

“Political situation centring the national polls is the main reason behind the recent volatility,” said Khairul Bashar Abu Taher Mohammed, secretary general of the Bangladesh Merchant Bankers' Association and chief executive officer of MTB Capital.

He said political tensions affecting stock markets were a common scenario globally. Investors are now adopting a wait-and-see stance, so the market has been affected. He expressed hope that the market would return to normalcy after the election.

Md Saifuddin, managing director of IDLC Securities, said investors had a perception that the market would be affected ahead of the election.

The benchmark index of the premier bourse dropped 33 points, or 0.62 percent, finishing the day at 5,218.01.

The index fell 143.1 points, or 2.67 percent, in the last seven trading days, according to the DSE.

A top official of another stock brokerage said institutional and foreign investors were in a wait-and-see mode.

“Some people are even playing at this time. The regulators should be careful about the manipulation, which may erode investors' confidence further,” he added.

DSE data showed that stocks of Paramount Insurance rose 44.78 percent to Tk 19.4, Sunlife Insurance was up 43 percent to Tk 28.7 and JMI Syringes advanced 28 percent to 256 Tk in the last two weeks.

Yesterday Square Pharmaceuticals dominated the turnover chart with 4.07 lakh shares worth Tk 10.18 crore changing hands, followed by JMI Syringes, United Power, Brac Bank and Anlima Yarn Dyeing.

Among the major sectors, only telecommunication witnessed an increase. The energy sector stayed flat while sectors such as banking, pharmaceuticals, food, non-banking financial institutions, and engineering all fell, according to IDLC Securities.

The top three negative index contributors were Olympic, City Bank and GPH Ispat.

Of the traded issues, 61 advanced and 231 declined while 47 securities closed unchanged.

Sunlife Insurance was the day's best performer with a 9.96 percent gain while Jute Spinners was the worst loser, shedding 9.88 percent.

Chittagong stocks also fell with the bourse's benchmark index, CSCX, declining 56.51 points, or 0.57 percent, to finish the day at 9,697.83.

• Courtesy: The Daily Star/ Business/ Dec 18, 2018