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Continuous stock market fall dampens investor sentiment in Bangladesh
Bangladesh stock markets have been going through a lot of setbacks in the past few weeks, putting a damper on investor sentiments.
Published : 14 Oct 2019, 01:24 PM
Updated : 14 Oct 2019, 01:24 PM
The DSEX, the key index of the Dhaka Stock Exchange, lost 300 points in the past three weeks.
Monday was the worst day as the index shed over 50 points or 1 percent to close at 4,711, dragging down by mainly the large cap sectors, heavyweight telecommunications that slumped nearly 3 percent.
Disgruntled retail investors said they would demonstrate outside DSE on Tuesday in protest against the continuous price fall in the stock market.
“Both big local and foreign investors were pulling funds from the market, sending a wrong message to the small investors,” said Ahmad Rashid Lali, former president of DSE Brokers Association.
“They are getting rid their holdings for fear of further losses.”
Foreign investors withdrew their investments mainly because of three reasons. One is the BTRC’s dispute over ‘unpaid dues’ with the Grameenphone and Robi which is yet to be settled and second, small investors are selling shares in panic over the freefall of the market, according to Lali.
"Another reason is that Bangladesh Bank started strengthening the greenback by devaluing the local currency.”
In the last two or three days, the value of taka against dollar has dropped by Tk 0.25. There are rumours in the market that the taka will be devalued dollar up to Tk 90.
“If the dollar becomes stronger against taka, it will harm foreign investment. That is why they are selling shares,” said the former president of DSE Brokers Association.
"And local investors lost confidence due to continued market fall. All the big and small players fail to understand when the downslide will stop."
Expressing his anger, Mizanur Rashid Chowdhury, a leader of the small investors, said almost all of their investments have evaporated.
"There is no demand for shares. A number of poor quality IPOs has flooded the market. How will the market be better?" he asked.
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