On the fourth working day of the week, the main capital market of the country, Dhaka Stock Exchange (DSE), ended with a big price drop. As a result, there was a slight rise in the index last Tuesday, but the stock market experienced a big fall in the index within a day. As a result, the capital market is not able to get out of the circle of falling prices. Due to continuous fall in prices, extreme disappointment is being noticed among the investors of the capital market.
With no initiative from any level, including regulatory agencies, to stem the decline, this frustration has started to drive investors away from the market. Because of this, investors are leaving the market every day. There is a shortage of buyers in the market. On the contrary, the seller is more. However, the capital market has fallen into a crisis of confidence and liquidity due to the ongoing price decline.
Moreover, due to lack of confidence in the regulatory body, new investors are not moving towards the market. Apart from this, institutional investors are sitting on their hands due to the fear that ‘investing still will result in losses’. As a result, new liquidity crisis has appeared in the market. Investors and market stakeholders fear that the crisis will intensify day by day.
In addition, the crisis is deepening due to the inability to attract new entrants and lack of confidence among active investors in the market. In the emerging situation, the participation of participants in the capital market is decreasing. Not only that, the beneficiaries in the capital market at various times also withdrew from new investments. In addition, constant force sales have further fueled the market decline. There are constant force sales from top brokerage houses. The regulatory body is not taking any effective initiative to stop the force sale.
According to the investigation, there has been a crisis of confidence in the capital market due to the immature decisions of the regulatory body Bangladesh Securities and Exchange Commission. However, as part of the capital market reforms, the new chairman and commissioner have taken over the responsibility of BSEC’s policy making. Even though 2 months have passed since assuming responsibility, trust is far from improving, on the contrary, trust has gone down further.
Among them, the new commission’s unwarranted decisions, unreasonable statements, reform initiatives without consultation with stakeholders, implementation of wrong policies issued by the previous commission, public imposition of large fines, inefficiency in appointing independent directors of stock exchanges are increasing one problem after another in the capital market. A new debate is brewing. The dearth of uncontroversial initiatives by regulatory bodies is greatly affecting the day-to-day transactions of capital markets. As a result, the fall in the capital market does not stop.
The chief executive officer of one of the top brokerage houses, who did not wish to be named, said that many investors are leaving the capital market every day due to the continuous fall in prices. Debt-ridden investors are facing more problems as a result of this fall in prices. Many of their shares are under forced sale or forced sale. When the share price falls below a certain threshold, the respective investor is invited to invest fresh money from the lending brokerage house or merchant bank.
If an investor does not make new investment, the brokerage house and merchant bank sell his shares and settle the loan. As a result, the more the price falls in the market, the more the pressure of forced sale increases. In this situation, initiatives should be taken to stabilize the market quickly.
It is known that at the end of the day, the DSE Broad Index is 71 points lower than the previous day at 5,169 points. And DSE Shariah index is down 11 points to 1 thousand 162 points and DSE 30 index is down 31 points to 1 thousand 892 points. Out of the 399 companies and mutual funds traded during the day, 52 advanced, 306 declined and 41 remained unchanged.
321 crore 99 lakh Taka were traded in DSE. Which is 36 crore 23 lakh less than the previous working day. The previous day, the transaction was Tk 358 crore 22 lakh.
