Small investors panic over stock market’s free-fall

Some quarters are playing in the stock market to create panic among investors and take advantage of the situation, insiders said.

They said there is no reason that the stock market will be in a free fall at a time when the economic activities have almost come back to normalcy with the declining coronavirus cases and deaths for nearly two months.

But that was not the case for the Bangladesh stock market, which has witnessed a fall for sixth day in a row. The most brutal day for the investors was on Monday as DSEX, the benchmark index of Dhaka Stock Exchange fell over 89 points or 1.24 percent to 7,097, the biggest fall since June 27 this year.

Turnover, another key indicator of the market, also declined to Tk 1,394 crore, lowest since June 29.

Overall, DSEX shed 270 points in the last six trading days, a trend that investors did not see since February this year.

“If the index goes down by more than a hundred points, it will naturally seem abnormal. As a result, the fall in today’s market has created panic among some investors,” said a CEO of a brokerage house.

A senior official of a leading merchant bank said there is no negative news either from the regulator or from Bangladesh Bank.

“May be, some quarters are trying to cash in on the situation,” he commented, wishing not to be named.

Trading on the DSE on Monday began on a positive note as prices of almost all companies were rising. DSEX rose by 15 points in just two minutes into the trade. However, the situation started changing after five minutes, DSE data showed. As a result, DSEX dropped 46 points in 20 minutes.

The index continued to go down after 11:30am and at one stage it shed 130 points. At the end of the trading session, the index recovered a bit and finished the day with 89 points down.

An investor named Naeem Hasan said the stock market was moving in the right direction, but suddenly it is falling again.

“I don’t know what I should do now,” a frustrated Hasan told this correspondent.

President of the Bangladesh Merchant Bankers Association Sayedur Rahman said share price of several companies rose significantly and now it is being revised down.

“There is no reason for investors to panic. The market will turn around soon,” he told the Business Insider Bangladesh.

Among other DSE indices, the shariah-based DSES fell by 21.14 points or 1.36 percent and the blue-chip DSE-30 shed 26.58 points or 0.98 percent.

Orion Pharmaceuticals was the most traded share on the DSE on Monday, followed by Delta Life Insurance, LafargeHolcim, BATBC, Fortune Shoes, Beximco, IFIC Bank, NRBC Bank, Genex Infosys and Power Grid.

Meanwhile, the overall index, CASPI of the Chittagong Stock Exchange shed 315 points to 20,707 and securities worth Tk 74.55 crore were traded on Monday.