Political uncertainty, profit-taking send stocks into fresh tailspin

Bangladesh’s capital market has been hit by a fresh wave of selling as political uncertainty and profit-taking shattered the fragile optimism that had driven a post-election recovery, sending the Dhaka Stock Exchange’s benchmark index to its lowest level in nearly three months.

The DSEX plunged 22 points on Thursday to 5,515, extending its losing streak to a third consecutive session as investors rushed to offload shares across almost every major category. The sharpest selling came in the final half-hour, wiping out early gains and leaving the market with a distinctly bearish finish.

The latest slide has intensified fears that the market’s hard-won recovery is losing momentum after investors had begun to regain confidence following February’s national election and the formation of the BNP-led government.

The market had started the year in deep distress, with the DSEX at 4,910 points after a prolonged downturn. It subsequently staged a powerful recovery, crossing 5,900 points at one stage and allowing investors to claw back part of the substantial losses accumulated over the previous years.

That recovery is now under renewed threat.

Stocks have been declining for almost a month, reviving investor losses and raising fresh concerns over the sustainability of the market rebound. Thursday’s broad-based sell-off further underlined the fragility of investor sentiment.

The session initially appeared to offer a possible turnaround. Most shares and units opened higher, pushing the DSEX upwards for almost three hours and briefly raising hopes that the prolonged bearish spell could be broken.

Those hopes evaporated towards the close.

A broad-based sell-off erupted during the final 30 minutes, sharply increasing the number of declining securities and dragging the market into negative territory.

At the close, prices of 230 listed shares and units had fallen, against only 103 gainers, while 54 remained unchanged.

Selling pressure spread across the market’s major categories. Among A-category companies�"generally regarded as quality companies with a record of paying dividends of 10% or more�"107 declined, while 67 advanced and 20 remained unchanged.

In the B category, only six companies gained, against 65 decliners and three unchanged issues.

The Z category also remained firmly under pressure, with 58 companies falling, compared with 29 gainers and 31 unchanged issues.
Mutual funds bucked the broader trend, with 32 advancing and only one declining.

The DSEX’s 22-point fall took it to 5,515, its lowest level since 8 June, when it stood at 5,482. The DSE-30 index, comprising 30 leading companies, fell seven points to 2,095, while the Shariah-based DSES declined five points to 1,105.

Trading activity on the CSE, meanwhile, suffered a dramatic contraction, with turnover plunging to Tk9.85 crore from Tk87.27 crore in the previous session.