Administrator
Cool Senior Forum Expert
Regist.: 12/19/2010
Topics: 309
Posts: 2083
 OFFLINE | Dhaka stocks plunge despite govt-backed intervention
Financial Express
28.02.2011
Dhaka stocks lost nearly six per cent Sunday to dive to ten-month low as coordinated purchases by five state-owned financial institutions failed to lift the gloom hanging over the market for the last eleven weeks.
The benchmark DGEN plunged for the fourth session running, shedding 5.82 per cent or 337.59 points to 5,463.35 - the lowest since April 13, 2010. Other indices toed the market barometer after a bright start.
The government has asked its four commercial banks - Sonali, Janata, Rupali and Agrani -- and the Investment Corporation of Bangladesh to buy share in droves in a desperate bid to boost the bourse.
But the reports of the government-backed purchases failed to cheer up the morale of hundreds of thousands of investors who have been hit hard by the recent market crash.
Most of the traded shares tumbled on the day as out 255 issues traded, only six advanced and 249 declined. Turnover also came down to Tk 5.01 billion, down by 10.4 per cent from the previous session.
In the last four trading sessions, DGEN has lost 926.27 points or more than 12 per cent. The benchmark market gauge has now shed 39 per cent since it hit the historic high of 8,918.51 as on December 5, 2010.
In the last eleven weeks, DSE market capitalisation has declined by staggering US$17 billion dollars to $35.39 billions. The market cap hit the peak on December 5 last year when it stood around $52 billion.
After a brief gain, market slumped steadily despite the government announcement at 12.45pm that its four banks and the ICB have been ordered to purchase share from the secondary market.
Analysts said massive erosion of confidence among the small investors continued to weigh on the market.
"The retail investors are selling their shares out of desperation. Even the government intervention could not lift their morale," said a leading merchant banker, speaking on condition of anonymity.
"Psychologically, the retail investors are broken down and their confidence has bottomed to zero. They need a huge support from the government and some major morale boosting corporate news to regain faith in the market," he said.
Dealers said barring the state-owned banks, most institutional investors were not active in the market, adopting a wait and see policy. "They want to buy shares at bargain prices", the banker added.
The broader DSE All Shares Price Index (DSI) ended at 4,533.65 with a fall of 276.77 points or 5.75 per cent while the DSE-20 blue chip index shed 218.41 points or 5.59 per cent to 3,687.51.
Fakhrul Islam, a leading broker of DSE smelled rat in the fall. "We have to find out whether there are any foul-plays behind the abnormal slump," he said.
The market lost across the board with banks, NBFIs, telecommunications and power and fuel plummeting 6.29 per cent, 6.16 per cent, 7.64 per cent and 3.94 per cent respectively. |
NEWS 28.02.2011
OFFLINE