Stocks witnessed yet another big fall on Monday, with the Dhaka Stock Exchange (DSE) core index tumbling below the 4,700 mark after three years.
The DSEX slumped 53.42 points or 1.12 per cent to settle at 4,699, the lowest level since November 17, 2016. The DSEX saw a cumulative loss of 276 points in the past one month and 1,251 points or 21 percent since January 24 last, when the index reached its peak at 5,950.
Among many reasons, rampant manipulation of some stocks and erosion of money have hit investors’ confidence and portfolio badly, said a number of analysts and investors.
United Power Generation, Monno Jute Stafflers, Monno Ceramics, IFAD Autos, Sonar Bangla Insurance, National Tubes, Standard Ceramic and some junk stocks witnessed huge price fluctuations in the last few months only because of manipulation and rumours, said the analysts.
According to DSE data, stocks of Standard Ceramic rose to Tk 740 from Tk 144 within six months and then again fell to Tk 410 within only 10 days of trade.
Stocks of Monno Jute Stafflers also showcased surprising fluctuations rising to Tk 2,032 from Tk 687 within two months and then plunging to Tk 913 within one and a half months.
Stocks of National Tubes rose to Tk 196 from Tk 122 between September 3 and October 10 without any valid reason, even after the company authority publicly urged for caution, saying that they had no undisclosed price sensitive information.
Meanwhile, eight listed companies declared on Monday “no” dividend for the year ended on June 30, 2019. The state-run ICB recommended only 10 percent stock dividend for the year ended on June 30, 2019, its lowest in the last 12 years. Salvo Chemicals, BD Thai, Renwick Jajneswar, Generation Next Fashions and Khan Brothers PP Woven Bag Industries dominated the losers’ chart on the day. They plunged 33.60 percent, 28.20 percent, 26.47 percent, 25 percent and 19.71 percent respectively following their “no” dividend declarations.
In early September, the stock market regulator identified some manipulators and forwarded their names to the legal department for punitive measures along with sending some stocks to the spot market. In the spot market, shares trade on liquid money so people are discouraged from buying such shares.
Yet manipulation continued even after such steps.
Market capitalisation shed Tk 63,700 crore in past nine months since January 24, DSE data showed. In the last one month, the premier bourse lost over Tk 17,650 crore from its market capitalisation.
Of the traded issues, 57 advanced and 260 declined while 36 securities closed unchanged on the premier bourse. National Tubes dominated the turnover chart with transactions of Tk 15.33 crore, followed by Sonar Bangla Insurance, Standard Ceramic, Monno Ceramics and VFS Thread.
Standard Ceramic was the day’s best performer with a 20.34 percent gain while Salvo Chemical was the worst loser, shedding 33.60 percent.
Chattogram stocks also went down with the bourse’s benchmark index, the CSCX, decreasing 79.52 points, or 0.90 percent, to finish the day at 8,710.30.
Losers beat gainers as 175 declined and 63 advanced while 16 finished unchanged on Chittagong Stock Exchange. The port city bourse traded shares and mutual funds worth Tk 13.67 crore.
The government took a series of market supportive measures, including redefining banks’ capital market exposure, to increase the fund flow to the market, but all the efforts went in vain.
Image Credit: The Financial Express, October 29.