Big earnings by giant companies fail to retain stock market indices

The listed corporate giants' big earnings and dividends have failed to attract investors and to keep the stock exchanges' indices high.

On Sunday, the Dhaka Stock Exchange's benchmark index DESX dropped 70 points to close at 7,005 and the Chattogram Stock Exchange's key index Caspi lost 122 points to stand at 20,570.

Due to the sale pressure, 292 companies' share prices declined, while only 57 advanced and 26 remained unchanged at the Dhaka Stock Exchange (DSE) on Sunday.

Recently, some of the big giants like Renata Limited, BSRM, Walton, Marico, and Square Pharmaceuticals declared handsome dividends and reported large growth in their profits, but that did not have much impact on their share prices.

Beximco is one of the few companies in which investors showed increased interest after it reported a historical profit growth and declared a good dividend.

Analysts said all types of investors in this market act like day-to-day traders. Institutional investors usually trade shares on a day-to-day basis, but currently, the retail investors are also doing the same thing. Their trading is dependent on rumours, which is very harmful to the stock market.

Dr Mahmood Osman Imam, professor of Finance Department at Dhaka University, told The Business Standard, "The securities regulator has not taken any significant action over the fluctuation of share prices caused by rumours. Often the share prices increase based on rumours, but when the companies reveal the actual information, the prices start to fall."

"Often the traders buy or sell shares based on rumours and later finds out that the rumours were true. This makes them prone to believing the rumours and act upon them," he added.

The daily turnover at the DSE stood at Tk1,471 crore on Sunday, which was 12% higher than the previous day.

Beximco Limited held 23% of the total DSE turnover.

In recent days, three or four companies have been holding more than 40% of the total DSE turnover.

Sharif Anwar Hossain, president of DSE Brokers Association of Bangladesh, told TBS that the concentration of turnover in a few companies is not a good sign for the stock market.

On Sunday, Aramit Cement and Beach Hatchery, which performed poorly in recent times, were the top gainers without any reason.

The shares of FAS Finance and Bangladesh Building System were the worst as they incurred losses in the last fiscal year.

In the block market of the DSE, the C&A Textile's 1.07 crore shares worth Tk8.98 crore were sold. C&A Textile has been closed for the last three years and the owners of the company have been absconding. Recently the Bangladesh Securities and Exchange Commission allowed the Alif Group to acquire C&A Textile's shares to keep the company in operation.