Dhaka stocks witnessed decline in its indices in past week for the fifth consecutive week as a section of investors continued selling shares to protect their funds amid the prolonged bearish vibe of the market and chose to observe the market trend before Eid-ul-Azha.
Eid-ul-Azha, one of the biggest religious festivals of the Muslims, will be celebrated in the country tomorrow. The Dhaka bourse will remain closed from today to Tuesday and resume trading activities from Wednesday.
The main index of the Dhaka Stock Exchange, DSEX, fell by 119.51 points, or 2.28 per cent, in the past week ending at 5,117.81 points. The index witnessed a smaller drop of 14.64 points in the previous week.
Over the past 17 weeks, the market has risen only three times and fallen in the other 14 weeks, including the past five consecutive weeks.
The weekly turnover on the Dhaka bourse dropped by 16.64 per cent to end at Tk聽1,882.27 crore in the past week compared with that of Tk聽2,258.02 crore in the previous week.
DSE operated on five sessions in the past week, among which three sessions declined and the other two saw gains.
On July 11, the key index of the DSE hit 3.5 years low and stood at 5,070.01 points.
Market experts said that investors were feeling down because they were unhappy with the new budget measures related to the capital market.
On June 6, finance minister Abul Hassan Mahmood Ali presented the proposed budget for the 2024-25 financial year at the Jatiya Sangsad in Dhaka. In the budget, the minister suggested a capital gain tax on individual investors if their profits went over Tk 50 lakh.
Market experts noted that many investors withdrew their money from the stock market before the Eid-ul-Azha festival to prepare for their celebrations.
They also pointed out that increasing economic concerns, including the continuous decline in the country鈥檚 foreign exchange reserves, have negatively impacted investors.
According to Bangladesh Bank data, foreign investments in the country鈥檚 capital market halved over the last two years.
The central bank reported that total foreign investments in the capital market were $1,084.63 million at the end of 2023 compared with those of $1,925.10 million at the end of December 2021.
Market experts mentioned that investor confidence dropped because the Bangladesh Bank decided to raise repo rates, which could lead to higher interest rates. This might cause investors to move their money to banks instead.
Additionally, the devaluation of the taka against the US dollar made the market situation worse.
Of the 394 stocks traded last week, 54 went up, 323 went down and 17 stayed the same.
Investors were mostly active in pharmaceutical scrips, followed by food and textile shares.
EBL Securities in its weekly market commentary said, 鈥楤argain hunters opted to take positions in the low-priced scrips in the last two sessions with positive expectations owing to the prevailing rumours on the probable withdrawal of the proposed capital gain taxes.鈥�
The DSE Shariah index decreased by 28.7 points, or 2.52 per cent, to close at 1,108.06 points in the past week.
The DS30 index lost 36.09 points, or 1.94 per cent, to finish at 1,821.89 points.
Beacon Pharmaceuticals topped the average weekly turnover chart with shares worth Tk聽28.47 crore daily changing hands.
Taufika Foods and Lovello Ice-cream, Asiatic Laboratories, Sea Pearl Beach Resort & Spa, Unilever Consumer Care, Alif Industries, Rupali Life Insurance, British American Tobacco Bangladesh, Square Pharmaceuticals and Central Pharmaceuticals were the other turnover leaders.