Investors are in panic due to a continuous decline in the stock market

The country’s main stock market, the Dhaka Stock Exchange (DSE), witnessed a significant decline in share prices yesterday, Wednesday. On that day, the DSE’s main index, DSEX, dropped by 72 points, or around 1 percent, to reach 5,763 points. This comes after a 67-point, or over 1 percent, decline in the index on the previous trading day, Monday. Earlier, there was also a major downturn in the index on Sunday.

Due to the consecutive losses in the past three trading days, the DSEX index has decreased by a total of 179 points, bringing it back to a position similar to about 35 months ago. The latest position of this index on May 12, 2021, was 5,750 points.

Similarly, the overall index of the Chittagong Stock Exchange (CSE) also decreased by 125 points, or about 1 percent, on Wednesday. Alongside, transactions in the Chittagong market have fallen below 10 billion taka.

However, trading increased in the Dhaka Stock market yesterday, reaching 53.9 billion taka.

Mohammad Rezaul Karim, the Executive Director of the Bangladesh Securities and Exchange Commission (BSEC), stated, ‘To reassure ordinary investors and prevent them from selling shares in a panic, we have requested brokerage houses and merchant banks to reassure investors. Efforts are also being made to encourage institutions to actively participate in investment. We hope that the market will stabilize very soon.’

Top executives of multiple brokerage houses and merchant banks stated that ordinary investors are currently in a state of panic due to the continuous decline in share prices. Most of them have become inactive, leading to a crisis of confidence in the market. Concurrently, there has been an increase in forced selling or ‘force sell’ tendency.

The top loser in yesterday’s downturn in the Dhaka stock market was IPDC Finance. The company’s share price dropped by almost 1.5 percent, or about 1.50 taka.

Over the past 15 trading days, the company’s share price has decreased by nearly 10 taka. A similar situation has occurred with the shares of British-American Tobacco Bangladesh Company (BATBC).

Over the past 15 trading days, the share price of this company has decreased by 116 taka. Since March 4, the company’s shares have been withdrawn from trading at the minimum price level, after which there has been a continuous decline in the company’s share price. Consequently, within the last two years, its share price has reached a minimum level.

Besides, significant declines occurred yesterday in the shares of companies like Renata, Beximco Pharma, Grameenphone, Pubali Bank, BRAC Bank, and City Bank, which are considered good companies.

Former Chairman of BSEC, Faruk Ahmed Siddiki, commented, ‘There are incidents of speculation involving shares of poorly performing companies in the market. Regulators need to be strict on speculation. At the same time, there must be transparency in applying the law and making any decisions to ensure market integrity. Then investors will regain confidence in the market.

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