Stocks
Over Half of the DSE money are still trapped at floor prices
The stock market with the unusual floor price support has regained vibrancy to generate over Tk1,000 crore in turnover daily and people on the street are talking about which stock to chase right now for astounding gains.
Everything is happening providing 52pc of scrips stuck on the price floor that came into result from the last trading session of July.
Hence, the 4 October market report by the research team of brokerage firm Royal Capital Ltd, 193 of the 369 scrips in the Dhaka Stock Exchange (DSE) were stuck at the floor price – which means there were lots of sale orders amid no buyers at the lowest allowable price.
The price floor being loved by a large number of dealers, mostly retail ones, is also frustrating significant market participants, especially institutional investors, who want the market to remain free enough to find more buyers and sellers for the sake of exchangeability and a genuine price discovery mechanism.
Blue-chip shares, that are stuck on the floor, increased the agonies of serious investors as many are unable to sell large-cap stocks such as Grameenphone (GP), Square Pharmaceuticals, BRAC Bank, Renata, Singer Bangladesh, regardless of their need for cash or will to hold onto trades.
10 of the 30 blue chip companies on the DSE are hibernating on the floor having bare trades at the price level.
BAT Bangladesh, BRAC Bank, Fortune Shoes, Grameenphone,(GP), Islami Bank, LankaBangla Finance, Renata, Robi, Singer Bangladesh and Square Pharmaceuticals were the DS30 companies stuck on the floor on Tuesday.
Like many, CFA Society Bangladesh President Shaheen Iqbal in a recent capital market hosted a show, suggests that the floor price should not be in place because it was causing the price and preventing the development of the capital market.
A stock might go down and also come back to its fair level in a free environment, he said, referring to the argument that a fall in stock prices is not the end of the world.
The floor steroid, hence, worked in helping the market recover from its 14-month low at the end of July.
DSEX, the broad-based index of the DSE surged by 9.43pc to 6,544 on Tuesday, from 5,980 on 28 July 2022.
The Bangladesh Securities and Exchange Commission (BSEC) made the price floor effective from 31 July, which is not allowing any money to trade below the then price level.
Responding to the criticisms of the stock market regulator’s repeated market disruption moves, BSEC Chairman Professor Shibli Rubayat-Ul-Islam in August said that the commission was undone because of the market structure – the dominance of retail investors who needs some protection.
Floor is so strong in the investors’ psyche in the bourses of Dhaka and Chattogram that a rumor in early September that the regulator might revoke the controversial price floor triggered a massive selloff in the stock market and the market later bounced back after the top BSEC officials’ promises that the commission was not even thinking of anything like that.
Dhaka Stock Exchange DSE, Bourse on the second working day of the week, April 16th, ended with a drop in Indices and surge in Turnover from the previous working session. This information is known from DSE sources.
540 crore 23 lakh taka shares were traded on this day. 76 crore 30 lakh taka more tradings were done in DSE today compared to the previous workday, 15th April , Shares worth Tk 367 crores 53 lakh shares were traded last time, Monday.
The benchmark DSEX lost 4.18 points or 5,774 The Shariah-based index DSES dropped 1.95 points or 1,264, and the blue-chip index DS30 decreased by 2.18 points or 2,012.
Of the issues traded, 173 advanced, 169 declined and 55 remained unchanged.
Prime Finance First Mutual Fund ranked top gainer on DSE, the share price increased by Tk 3.70 paisa or 9.97 percent. On this day, the share was last traded at Tk 40.80 paisa.
Central Insurance Company Limited ranked top loser on the DSE, the share price dropped by Tk 2.80 paisa or 4.91 percent. On this day, the share was last traded at Tk 54.20 paisa.
DSE topped on trade is Beacon Pharmaceuticals Limited 29 crore 36 lakh takas of company shares have been traded.
A total of 33 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 8 lakh 72 thousand 35 shares of the companies were traded. The financial value of which is 34 crore 44 lakh taka
Asian stocks fell and oil prices climbed Tuesday on growing fears of a wider war in the Middle East after Israel’s army chief vowed a response to Iran’s unprecedented attack on his country at the weekend.
The selling came after Wall Street’s three main indexes tanked in response to forecast-beating US retail sales data that reinforced the view that the world’s top economy remained in rude health and further dented hopes for interest rate cuts this year.
Traders were also digesting a mixed bag of figures showing Chinese growth easily beat expectations in the first three months of the year but retail sales and industrial production came in well below par.
All eyes are on the Middle East after Tehran fired hundreds of missiles and drones at its regional enemy, saying the attack was retaliation for an April 1 strike on the consular annex of its Damascus embassy that killed seven Revolutionary Guards including two generals.
While air defence systems destroyed the vast majority of the barrage and Iran said “the matter can be deemed concluded”, Israel’s army chief General Herzi Halevi sounded a note of warning, fuelling worries of a dangerous escalation.
“This launch of so many (Iranian) missiles, cruise missiles, and UAVs into the territory of the State of Israel will be met with a response,” Halevi told troops at the Nevatim military base, which was hit in Iran’s Saturday barrage.
However, he added that the military would not be distracted from its war against Hamas in Gaza.
Warren Patterson, at ING Groep, said the prospect of a response by Tel Aviv “means that this uncertainty and tension will linger for quite some time”.
“The more escalation we see, the more likely we are to see oil supply from the region impacted.”
Oil prices rose in Asian trade, having slipped Monday on hopes for a de-escalation following US calls for Israeli Prime Minister Benjamin Netanyahu to “take the win” and forgo a counterattack.
In early trade, Tokyo, Hong Kong, Shanghai, Seoul, Singapore, Taipei, Wellington, Manila and Jakarta were all sharply down.
– China’s mixed data –
Investors appeared to ignore figures showing China’s economy grew 5.3 percent in the first three months of the year, well above the 4.6 percent predicted in an AFP survey of analysts.
However, other data reinforced worries about the outlook, with industrial production and retail sales coming in well below forecasts, ramping up worries about the prospects for the next quarter.
“China data appears to be strong on the headline, but the details are weak, said Saxo’s Charu Chanana.
“This would suggest that the economy needs more support, and markets will continue to position for a weak yuan.”
The losses in Asia followed a big sell-off on Wall Street, which was dragged down by tech giants including Amazon, Apple and Alphabet.
That came after figures showed March retail sales beat expectations in yet another indication that the US economy remains strong despite two-decade-high interest rates.
The reading followed news that inflation came in above estimates for the third time in a row last month, while jobs creation was also much stronger than forecast, putting pressure on the Federal Reserve to hold off cutting interest rates.
Investors are now betting on just two reductions this year, compared with six pencilled in at the beginning of January.
And UBS has warned that borrowing costs could even go up if inflation is not brought under control.
“If the (economic) expansion remains resilient and inflation gets stuck at 2.5 percent or higher, there would be real risk the (Fed policy board) resumes raising rates again by early next year,” said UBS strategists including Jonathan Pingle and Bhanu Baweja.
Meanwhile, San Francisco Fed boss Mary Daly said there was no rush to reduce rates just yet, adding that she wanted to be confident inflation was coming down to the bank’s two percent target.
Treasuries hit new year-to-date highs Monday after the retail sales report.
With rates seen staying higher for longer, the dollar continued to strengthen, and briefly hit a new 34-year high of 154.45 yen, putting the focus on Japanese authorities amid speculation they will step in to support the currency.
Finance Minister Shunichi Suzuki said Tuesday that “we are closely monitoring the latest developments”.
– Key figures around 0300 GMT –
Tokyo – Nikkei 225: DOWN 2.1 percent at 39,405.58 (break)
Hong Kong – Hang Seng Index: DOWN 1.5 percent at 16,346.71
Shanghai – Composite: DOWN 1.5 percent at 3,011.12
West Texas Intermediate: UP 0.9 percent at $86.14 per barrel
Brent North Sea Crude: UP 0.8 percent at $90.80 per barrel
Dollar/yen: UP at 154.36 yen from 154.24 yen on Monday
Euro/dollar: DOWN at $1.0608 from $1.0626
Pound/dollar: DOWN at $1.2423 from $1.2449
Euro/pound: UP at 85.38 pence from 85.31 pence
New York – Dow: DOWN 0.7 percent at 37,735.11 (close)
London – FTSE 100: DOWN 0.4 percent at 7,965.53 (close)
One of the Listed companies, Prime Bank PLC has recommended 17.5% Cash Dividends for the year ended December 31, 2023.
In terms of financial performance, The Company has further informed Consolidated EPS of Tk. 4.24 for the year ended December 31, 2023. The Company has also reported Consolidated NAV per share of Tk. 30.76 for the year ended December 31, 2023.
The Annual General Meeting (AGM) of the company will be taking place on May 30, through the digital platform. The record date for this has been fixed at May 7.
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