Stock Regulatory measures on several market manipulators caused a plunge last week: Analysts
The benchmark index of the stock markets plunged into losing territory last week as investors became anxious about the market’s momentum.
The jittery investors continued to offload their shares amid repeated regulatory actions against stock manipulations.
Market analysts attribute the recent decline in stock market activity to a combination of factors, including waning investor confidence and heightened uncertainty. This sentiment was further dampened by the recent imposition of significant fines on several market manipulators.
In a bid to curb market manipulation and instill discipline, the Bangladesh Securities and Exchange Commission (BSEC) levied fines totaling approximately Tk 2.70 billion on multiple entities in two phases this week. Additionally, the BSEC has ordered a special audit of three major concerns within the Beximco Group.
These latest regulatory actions are part of a broader effort to restore integrity to the capital market.
As a result, the market witnessed a continuous selling spree throughout the week, while the news of the disbursement of the Tk 3,000 crore sovereign-guaranteed loan to ICB also failed to subside the prevailing pessimism pervading the trading floor, leading the bears to take control of the market momentum.
In the last week, DSEX, the broad index of the Dhaka Stock Exchange, lost 91.4 points, or 1.8 percent, to settle at 5,105 points. Investors' participation in the market also declined by 27.5 percent to Tk3, 22.2 crore as compared to Tk381.3 crore in the previous week.
Investors were mostly active in Pharma sector at 17.3 percent, followed by Textile sector at 16.3 percent and Bank sector at 10.9 percent. All the sectors, except textile 0.6 percent, ended in red with Paper sector minus -6.2 percent being the biggest loser.
Last week, the stock market experienced a significant decline, with the market capitalization shedding Tk11200 crore to reach Tk 6,52400 crore on Thursday. A sell-off of large-cap stocks primarily drove this downturn.
A notable contributor to the market's decline was Islami Bank, whose stock price plummeted over 11 percent to close at Tk 45.6 on Thursday. This single stock accounted for a 42-point drop in the key index. Other significant decliners.
Most of the traded stocks saw price erosion, as out of 392 issues traded, 293 closed lower and 76 ended higher, while 23 others remained unchanged.
Orion Infusion was the most-traded stock with shares worth Tk 1.11 billion changing hands, followed by Dragon Sweater, Asiatic Laboratories, Lovello Ice-Cream, and Saiham Cotton Mills.
The Chittagong Stock Exchange (CSE) also ended lower, with the CSE All Share Price Index (CASPI) losing 277 points to settle at 14,304 and its Selective Categories Index (CSCX) shedding 169 points to close at 8,702.
The port-city bourse traded 1.30 crore shares and mutual fund units with a turnover value of Tk 27 crore.
