Economic jitters felt by stock market

The jitters surrounding the state of the economy are reverberating on the stock market, with the key index dropping for the fifth day in a row.

Between July 7 and yesterday, DSEX, the benchmark index of the Dhaka Stock Exchange, which has been on a declining trend since the start of this month, shed 150 points or 2.4 percent to close at 6,216.9. Yesterday, it dropped 87.4 points.

"Investors are tensed about the economic situation," said Abu Ahmed, a stock market analyst.

Yesterday's announcement of a load-shedding plan heightened the investors' jitters as it heralds tougher days ahead.

"I have not seen such pessimism among investors in the last three years."

As much as 90 percent of the stocks found no buyer yesterday, said Ahmed, a former chairman of Dhaka University's economics department.

Turnover, an indicator of the level of activity in the bourse, stood at Tk 515.3 crore yesterday, down 13.2 percent from the previous day.

"Most are trying to dump their shares and wash their hands off the stock market for a while as they fear deepening challenges in the coming months," said a top official of a stock brokerage firm requesting anonymity due to the sensitivity of the matter.

Since the Bangladesh Securities and Exchange Commission is not allowing any stock to drop more than 2 percent in a day, the index has been saved from registering massive drops.

"The global turmoil impacted the Bangladesh economy and that was reflected on the stock market," said Ershad Hossain, chief executive officer of City Bank Capital.

Both the DS30, the blue-chip index; DSES, the Shariah index; and DSMEX, the SME index, dropped 31.7 points, 16.6 points and 189.9 points respectively yesterday.

CASPI, the broad-based index of the port city's bourse, lost 242 points, or 1.3 percent, to close at 18,280.

Turnover at the CSE stood at Tk 13.61 crore yesterday, down from Tk 19.5 crore the previous day.