Stocks slump to 3-year low

Stock market indices dropped again yesterday after rising on the preceding day as a fact-finding meeting of the Bangladesh Securities and Exchange Commission (BSEC) failed to restore confidence among investors.

The DSEX edged down 41.26 points, or 0.73 percent, to close at 5,633.61, which is a 35-month low, meaning the lowest since May 2021.

The DSES, an index that represents Shariah-compliant companies, fell 7.36 points, or 0.59 percent, to 1,235.73. Likewise, the DS30, which comprises blue-chip stocks, dropped 3.48 points, or 0.17 percent, to 1,980.43.

On Monday, the BSEC held the meeting with stakeholders to restore investors' confidence, which has been hit by the lingering economic crisis and lower-than-expected corporate profits as well as forced sales executed by brokerage houses.

However, turnover, which indicates the volume of shares traded during a session, increased 3.94 percent to Tk 5.97 crore.

Of the issues that changed hands on the DSE, 50 closed higher, 310 ended lower and 36 did not see any price oscillation.

"The BSEC urged stakeholders to invest more during Monday's meeting, but this will not ensure the flow of more funds into the market," said a top official of a stock brokerage firm, requesting anonymity.

"If long-term steps are not taken to restore governance in the stock market, investors will not regain their confidence."

If the market can manage to attract some initial public offerings of companies with a good performance record and if good governance can be ensured, investors will come back and invest on their own accord, he added.

A top official of a merchant bank said with the fall of the market for five days to Sunday, most investors lost funds.

"Therefore, they are now in a panic. Until effective steps come about from the regulator regarding good governance, the stock market will not return to a bull run."

The merchant banker urged the regulator to work on the fundamentals, such as bringing in companies with good performance records, ensuring good governance, and reducing manipulation.