DSE market cap drops Tk20,000cr in six days
On the day, the DSE key index settled at 5,393 points, which was also the lowest in 37 months.
The market capitalisation at the Dhaka Stock Exchange (DSE) has plummeted by approximately Tk20,000 crore over the past six days, as the major index continued to decline amidst a severe confidence crisis among investors.
The DSEX of the DSE plunged by 37 points to settle at 5,393 today (20 May), marking its lowest level since April 19, 2021.
Today's downfall extended the losing streak to six straight days.
According to the Central Depository of Bangladesh, over 2,000 beneficiary owners (BO) accounts were emptied in the last six days.
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Stockbrokers and market experts said too many negative triggers – rising interest rates, fears of taxes on individual investors' capital gains from listed securities, subdued corporate earnings, and a serious confidence crisis – are collectively hurting stock bulls.
EBL Securities said in its daily market review, the equity indices of the capital bourse shattered into red terrain for six consecutive sessions as nervy investors shy away from taking positions in equities and continued to trim their exposure to capital market investments to escape further losses owing to the prolonged subdued market sentiment with no sign of revival yet.
"The National Board of Revenue's move to impose a 15% tax on individual investors' capital gains over Tk40 lakh from the stock market created a fresh round of selloff in the market recently," said Md Saiful Islam, president of the DSE Brokers Association (DBA).
The market stopped falling earlier this month when the Bangladesh Securities and Exchange Commission (BSEC) Chairman Prof Shibli Rubayat Ul Islam, told journalists that NBR officials had assured him there would be no imposition of such tax right now.
However, the market dived deeper following news updates last week that the NBR had initially sought and obtained Prime Minister Sheikh Hasina's approval to proceed with the capital gain tax, alongside many other tax elements of the upcoming national budget.
"The time is tough right now for stock investors," said the DBA president, adding that the recent regulatory intervention by limiting the daily downward price limit to 3%, down from 10%, has also disrupted the market rhythm.
Abu Ahmed, former professor of economics at the University of Dhaka, blamed the lack of good governance, listing of weaker firms for the last one and a half decades, insider trading, market manipulation, and frequent unconventional regulatory interventions in trading as significant factors that have hurt the market's most significant element – trust.
Meanwhile, investors' participation remained stagnant with market turnover slightly increasing to Tk560 crore on the day as against the previous session.
The EBL Securities said, the market witnessed daylong volatility while sellers continued their dominance across the trading floor, which led the majority of scrips to extend their correction mode while many remained stuck at the revised lower circuit without having sufficient buyers.
