Dhaka stocks experienced significant declines in the past week, as anxious investors consistently sold off shares amid the prolonged market volatility and ongoing economic concerns in the country.
DSEX, the key index of the Dhaka Stock Exchange, lost 205.02 points, or 3.72 per cent, over the past week to close at 5,312.40 points, after losing 143.63 points in the previous week.
The DSE has been on a losing streak in recent weeks, and has lost a total of Tk聽58,552.86 crore in its market capitalisation in the past eight sessions.
The market capitalisation of DSE was Tk 7,11,619.58 crore on May 13, and it came down to Tk聽6,53,066.72 crore on May 23.
Market operators said that investors were reacting to rising economic worries in the country.
The forex reserve of the country fell to $13.76 billion, with the gross reserves dropping to $18.26 billion on May 12, marking a 10-year low, according to Bangladesh Bank data.
Market operators said that forced selling was one of the key reasons for the relentless fall in share prices.
The National Board of Revenue鈥檚 move on imposing capital gain tax on individual investors dampened the investors鈥� mood, they said.
Forced selling or forced liquidation usually entails the involuntary sales of聽assets聽or securities to create聽liquidity.
Market operators also said that the Bangladesh Bank鈥檚 decision on increasing repo rates, which might lead to interest rate hikes in the money market impacted negatively on the capital market, as investors might shift funds to banks.
The devaluation of the taka against the US dollar might add to the depressed state of the market, they added.
They also said that multiple other factors were working behind the prolonged bearish trend of stocks, such as lack of investor confidence amid economic woes in the country and global geopolitical tensions, liquidity crisis in banks and sudden change of policies.
In the past 14 weeks, the market moved forward in only three weeks. Out of the 386 issues traded in the past week, 28 advanced, 338 declined and 20 remained unchanged in the past week.
With the decrease in the investors鈥� activity, the weekly turnover of DSE witnessed a dive, by 32.29 per cent to Tk聽2,070.02 crore in the past week compared with that of Tk聽3,821.41 crore in the previous week.
Investors were mostly active in pharmaceutical scrips, followed by food and textile shares.
EBL Securities in its weekly market commentary said, 鈥楧espite the regulatory initiative to raise the non-margin limit facility for ICB Securities, the enduring pessimism failed to alleviate since the market remained dominated by sellers throughout the week amid uncertainties leading up to the national budget declaration.鈥�
The DSE Shariah index decreased by 52.62 points, or 4.34 per cent, to close at 1,159.54 points in the past week.
The DS30 index lost 66.29 points, or 3.36 per cent, to finish at 1,907.70 points.
Unilever Consumer Care topped the average weekly turnover chart with shares worth Tk聽34.10 crore daily changing hands.
Orion Pharma, ACI, Taufika Foods and Lovello Ice-cream, British American Tobacco Bangladesh, Beach Hatchery, Orion Infusion, Alif Industries, eGeneration, and Asiatic Laboratories were the other turnover leaders.