Staff Correspondent
Dhaka stocks suffered a massive plunge on Sunday, prompting a number of retail investors, uncertain about the efficacy of the capital market stimulus package announced by the Securities and Exchange Commission and its implementation, to take to the streets.
The benchmark general index of Dhaka Stock Exchange, or DGEN, nosedived by 5.73 per cent to close the day at 5,065.17 points.
Retail investors staged a demonstration in front of the DSE building in Motijheel demanding immediate implementation of the pledges made by prime minister Sheikh Hasina one week ago.
‘We have been banking on the prime minister’s assurance of stabilising the market and announcing a mechanism of recovering the capital losses incurred by the small-scale investors. But, the SEC has failed to
specify any such measures in the bail-out package,’ said Bangladesh Capital Market Investors Council president Mizanur Rashid Chowdhury.
He said if the announced measures were really going to help the market then the government should implement them immediately to prove their effectiveness.
He also alleged that ‘A vested quarter is deliberately spreading panic by bulk selling shares and the SEC should identify them’.
If the market is not stabilised in the next two days, the retail investors will launch a tough programme, he announced.
At around 2:10pm, investors from different brokerage houses gathered in front of the DSE building and formed a human chain. They chanted slogans against finance minister Abul Maal Abdul Muhith, Bangladesh Bank governor Atiur Rahman, and DSE president Shakil Rizvi.
The demonstrators also brought out a series of processions at regular intervals that paraded from Shapla Square to Ittefaq crossroads. The demonstration ended at around 4:00pm in front of the Investment Corporation of Bangladesh head office.
The day also saw the turnover of the bourse dropping to Tk 451.43 crore from that of Tk 530.92 crore in the previous trading session.
Market operators said the reduced turnover indicated that the institutional investors were yet to become active in the market.
‘The stimulus package could not fully meet the investors’ expectations and we saw the result today,’ Salahuddin Ahmed Khan, a professor of finance at Dhaka University, told New Age.
He said, ‘The market bail-out package will not change the scenario within a day or two and the investors need to understand that.’
The professor, also a former chief executive officer of the DSE, said the announced measures would offer some relief to the banks but they would not be able to increase their participation in the market ahead of December closing.
The SEC, in line with the prime minister’s instructions, announced on Wednesday a 21-point stimulus package containing short-, mid- and long-term measures aimed at increasing participation of the banks and their financial institutions to stabilise the market.
The short-term measures of the package include easing the banks’ exposure calculation system and extending their single-borrower exposure deadline. The stimuli also include withdrawal of the gain tax imposed on foreign institutional investors and non-resident Bangladeshis.
‘The investors have been expecting an overnight change after the announcement of the stimulus package. But implementation of the announced measures will take some time,’ DSE president Shakil Rizvi told New Age.
He also advised the retail investors not to panic and go for long-term investment and trading plan.
SEC officials refused to make any comment about the market situation on Sunday.
The DGEN gained 947 points in four trading sessions last week following prime minister Sheikh Hasina’s intervention to bring back stability in the market after the index had taken a 560-point plunge in three days since resumption of share trading on the DSE after the Eid vacation.
Of the 254 issued traded on Sunday, only seven advanced, with all the remaining 247 scrip suffering a decline.
Source: newagebd.com/newspaper1
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