Stocks tumble to 17-month low as real value emerges

The key index for measuring the overall performance of share prices in the stock market of Bangladesh slipped to a 17-month low today, marking two days of consistent decline, while turnover also fell.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), shed 70 points to close the trading session at 6,156 points, down by some 1.12 percent from the day prior.

Similarly, the DSES index comprising shariah-compliant companies edged down 20 points, or 1.50 percent, to close at 1,352 points.

Even the DS30, an index that represents the share price performance of blue-chip stocks, was not safe from decline as it lost 24 points to close at 2,114 points, down 1.14 percent from the day before.

The market indices fell as some stocks of the engineering and pharmaceutical sectors faced colossal selling pressure, according to an official of a leading stockbrokerage.

Besides, the share value of some listed companies shrank as their performance is not up to the mark, he added.

However, this fall was expected as the floor price mechanism in place for the past one-and-a-half years had kept share values artificially inflated by restricting their decline beyond a certain point.

The Bangladesh Securities and Exchange Commission had reintroduced floor prices in July 2022 to halt the free-fall of market indices amid the lingering economic impacts of Covid-19 and Russia-Ukraine war.

But now that the mechanism has been removed, share values are adjusting to their actual level, he said.

Shares of Beacon Pharmaceuticals dropped 7.79 percent and thereby dragged down the DSEX by 12 points, making it the biggest contributor to the index's decline for a second day in a row.

Shares of Beximco Pharmaceuticals saw the second highest fall of 5.67 percent, taking 11 points away from the index, while that of Square Pharmaceuticals contracted 0.90 percent to subtract 5 points.

Turnover, an indicator of the market's liquidity, dipped 25 percent to Tk 870 crore from Tk 1,173 crore the previous day. Of the securities traded, 85 issues advanced, 282 declined and 22 were unchanged.

The engineering sector made the biggest contribution to the turnover with transactions of Tk 120 crore.

Meanwhile, the pharmaceuticals sector added Tk 112 crore and the general insurance sector provided Tk 90 crore of the day's turnover.

Among all sectors, shares of non-bank financial institutions saw the sharpest decline of 4.45 percent followed by fuel and power with 3.25 percent, and textiles with 2.97 percent.

The situation was similar at the Chittagong Stock Exchange as the CASPI, the broad index of the port city bourse, dropped 259 points to close at 17,552 points, down 1.45 percent from the previous day.

Sikder Insurance posted the steepest rise by gaining 10 percent while Khulna Printing and Packaging followed with 9.86 percent.

Among other gainers on the day, shares of GBB Power increased 9.70 percent while that of Karnaphuli Insurance surged 9.29 percent and Express Insurance advanced 9.18 percent.

On the other hand, shares of GSP Finance saw the deepest decline of 10 percent while that of BD Finance was down 9.96 percent.

Likewise, shares of Doreen Power dropped 9.89 percent, HR Textile fell 9.89 percent and Kattali Textile shed 9.84 percent.