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  • Last Update : 04:24 pm

Concern over ailing banking sector pulls down stocks

  • Published at 10:43 pm February 26th, 2020
web-DSE-File photo of Dhaka Stock Exchange Limited
File photo of Dhaka Stock Exchange Limited Mehedi Hasan/Dhaka Tribune

Key index falls for five straight days

DSEX, the key index of Dhaka Stock Exchange (DSE), fell on Wednesday for the five straight sessions amid concerns over the ailing banking sector due to the implementation of the single-digit lending rate.

The DSEX settled at 4,549 after losing 72.09 points or 1.56% on Wednesday's session. Total turnover took a negative turn and ended at Tk627 crore, which is 0.4% less than that of the last session.

Market insiders said that the implementation of the single-digit lending rate would slow down credit flow to the private sector. They also think that the economy and capital market will slow down too. 

The banking sector is already being affected by this impending policy change — in the past two trading sessions it lost 4.4% in value. 

Telecommunication, bank, NBFI and food and allied sectors observed the highest sell pressure from the investors, they also said.

Two other indices also ended lower. The DS30 index, comprising blue chips, fell sharply by 33.26 points to close at 1,517 and the DSES index lost 9.61points to settle at 1,060.

Losers took a strong lead over the gainers, as out of 356 issues traded, 226 closed lower, 84 ended higher and 46 remained unchanged on the DSE trading floor.

EBL Securities Limited in its daily market commentary said that the market started to take a hit from the early session and registered a stiff fall at the end as investors grieved on the probable impact of 9% lending rate on the economy, added to that reluctance in the formation of special fund even after two weeks of BB’s declaration seemed to lay investors in a doubt about a soon-to-be market recovery.

Among large-cap companies, Brac Bank (-9.5%), BATBC (-1.8%) and Grameenphone (-1.5%) were hit the most.

Grameenphone topped the turnover chart with shares worth Tk16 crore changing hands, closely followed by Indo-Bangla Pharma, VFS Thread Dyeing, Brac Bank and National Polymer.

Central Pharma was also the day’s best performer, posting a gain of 9.56% while Brac Bank was the worst loser, losing 9.5%.

Market insiders said that the Grameenphone, the large-cap stock, got a beating on court’s order to pay remaining Tk1,000 crore in 90 days over its disputed audit claim that led the market fall while many nervy investors continued to sell shares to opt for safer and more profitable securities.

The port city’s bourse, Chittagong Stock Exchange also registered loss at the end of the session. The selected index, CSCX and all Share Price Index, CASPI declined by 128.4 and 207.8 points respectively.

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