Stocks keep falling as experts warn against speculative trading

Although the key index for measuring share price performance in the stock market of Bangladesh fell to an 18-month low yesterday, some poor-performing companies saw their share values soar on the back of rumour-based trading.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), contracted by some 1.25 percent to 6,079 points by the end of the trading session to register three days of constant decline.

Similarly, the DS30, which represents blue-chip stocks, edged down by 1.14 percent to 2,091 points while the DSES, comprising shariah-compliant companies, decreased by 1.11 percent to 1,337 points.

Meanwhile, daily turnover, an indicator of the total value of shares traded, remained below Tk 1,000 crore with transactions at the country's premier bourse amounting to Tk 880 crore.

Stock market analysts say the market's downtrend was expected as share values have started to adjust with the macroeconomic situation following the removal of floor prices.

However, the alarming side is that the share values of some poor-performing companies have soared.

Khulna Printing and Packaging Ltd topped the gainers' list with a rise of 9.93 percent followed by Sikder Insurance with 9.91 percent, Coppertech Industries with 9.48 percent, GBB Power with 9.52 percent and Orion Infusion with 8.27 percent.

Among them, Khulna Printing's loss per share was Tk 0.11 in the second quarter of fiscal 2022-23. Besides, the company has not published any financial reports since then.

This prompted the DSE to send two notices to the company in recent months, asking whether it has any unpublished price sensitive information that could have fuelled the unusual performance of its shares.

But with Khulna Printing yet to reply, the company's share price has been rising for the past few weeks.

Shares of Coppertech Industries and GBB Power also rose in the past few days even though both companies are B-category stocks for their consistent failure to perform well.

Most of the trading is centred on speculative stocks and so, the values of well-performing stocks remain at a low level, according to a stockbroker.

Citing how it is not a good sign for the market that speculative stocks are being traded at a higher volume, he said investors should remain cautious and avoid rumour-based trading.

Shares of GSP Finance eroded the most by declining 10 percent while that of Tamijuddin Textile fell 9.95 percent, BD Finance lost 9.92 percent and HR Textile shed 9.91 percent.

Among the major sectors, ceramics dropped 7.55 percent while engineering fell 5 percent, textiles edged down 4.44 percent and non-bank financial institutions retreated 4.22 percent.

General insurance stocks saw the most trade with transactions of Tk 149 crore followed by the pharmaceuticals sector with Tk 121 crore, engineering sector with Tk 118 crore, and food and allied sector with Tk 59 crore.