Stocks
No Companies Transitioning to ‘Z’ Category yet, says DSE MD
Recently, due to spreading rumors on social media platforms, the stock market has been adversely affected. There is a rumor circulating in a Facebook group that some companies listed on the Dhaka Stock Exchange (DSE) are transferring to the ‘Z’ category. However, according to Dr. A.T.M. Tariquzzaman, the Managing Director of the Dhaka Stock Exchange, no decision has been made yet to send any company to the ‘Z’ category. He also informed that without the permission of the Bangladesh Securities and Exchange Commission (BSEC), DSE cannot directly send any company to the ‘Z’ category. At the same time, the Managing Director of DSE, Md., stated that tough action will be taken against those involved in spreading baseless information and rumors through social media. He said efforts are underway to identify those who have tried to destabilize the market by spreading such rumors. Strict measures will be taken against the culprits legally so that no one can spread such rumors in the future. DSE is taking stringent steps in this regard.
Recent developments have once again stirred up a self-serving environment, aiming to destabilize the country’s stock market, primarily utilizing the tool of social media, particularly Facebook. A few days ago, rumors about floor prices had created instability in the market, sparking a cycle of speculation. Subsequently, a rift between the regulatory body, BSEC, and DSE, led to the dissemination of various baseless rumors, further destabilizing the situation. Amidst this ongoing turmoil, new rumors have surfaced, alleging that several companies listed on the primary stock exchange, DSE, are being downgraded to the ‘Z’ category. The significant impact of such rumors on market stability is already evident. However, stakeholders have affirmed that these rumors, like previous ones, are baseless.
Dr. A.T.M. Tariquzzaman, the Managing Director of the Dhaka Stock Exchange (DSE), stated on Sunday (March 17th) to Orthosongbad that the information circulating regarding several companies being shifted to the ‘Z’ category by DSE is baseless and mere rumor. No decision has been made by DSE to downgrade any company to the ‘Z’ category at this moment. There is currently no company newly categorized as ‘Z’. Additionally, according to BSEC’s directive, DSE would require commission approval to directly downgrade any company to the ‘Z’ category. However, in the future, DSE may have the authority to directly transfer companies to the ‘Z’ category. Previously, any company transferred to the ‘Z’ category was done so in accordance with the law and after informing BSEC. Dr. Tariquzzaman advised investors not to be alarmed by baseless information and rumors. DSE is working to identify those spreading rumors. Individuals involved in spreading baseless rumors will be identified and brought within the purview of the law to prevent such actions in the future.
On February 15th, initially, 22 companies, and subsequently, on March 4th, an additional 6 companies sent to the ‘Z’ category. However, new rumors have emerged suggesting that several more companies are heading towards the ‘Z’ category, and for those companies whose shares are still trading at floor prices, their floor prices are increasing. Several companies’ lists are being circulated on social media platform Facebook, spreading rumors. Among these lists, several companies have already been categorized under the ‘Z’ category. Despite this, ordinary investors are becoming anxious, believing in these baseless rumors. Market participants believe that such rumors are creating an unstable situation in the stock market. However, as of now, the Bangladesh Securities and Exchange Commission (BSEC) has not taken any decision regarding this matter.
Prior to this, on March 10th, in a press release, BSEC informed about their position regarding the ‘Z’ category and floor prices. Cautioning against rumors, BSEC stated in the press release that baseless rumors about floor prices and the ‘Z’ category are being spread intentionally through social media to incite a particular agenda in the stock market. Currently, the commission has no intention of making any such decision. BSEC has urged everyone to be vigilant against such rumors and has requested cooperation from all parties, including DSE, to counteract those who create such rumors.
It is known that except for six companies, the Securities and Exchange Commission (BSEC) has revoked the floor prices of all other companies’ shares. After the revocation of floor prices, the stock market has gradually regained momentum. From January 29th to February 11th, the Dhaka Stock Exchange (DSE) witnessed a continuous rise for ten consecutive trading days, during which the index gained 368 points. Moreover, from February 1st to February 15th, daily transactions exceeded one billion taka. Between February 4th and February 13th, transactions surpassed four billion taka for eight consecutive trading days. However, the trend of the market’s upward movement has been disrupted by false information and rumors, resulting in a decline in both transactions and indices.
As a result of the rumors, the market has remained in decline for the past few days. Due to the continuous downward trend, on Wednesday (March 13th), the main index of DSE, ‘DSE X’, returned to its previous position before the floor price imposition. On that day, the main index ‘DSEX’ of DSE dropped by 32.76 points to stand at 5,974 points. Previously, on July 28, 2022, the DSE Broad Index ‘DSEX’ fell below 6,000 points. The index stood at 5,980 points. On that day, in the afternoon, BSEC imposed the floor price or the lower limit for shares in the market.
Earlier, on March 7th, the main index of the exchange, ‘DSEX’, lost 53.37 points. The index stood at 6,112 points on that day. Additionally, the index of selected companies, ‘DS30’, decreased by 12 points. And the index of Shariah-based companies, ‘DSES’, dropped by 7.12 points. Since then, the market has been bearish.
Recently, the impactful effects of the rumors surrounding the ‘Z’ category have been observed during the farewell week. During the last week (March 10th to March 14th), the market capitalization at DSE decreased by over 49 billion taka. Moreover, trading at DSE declined by 31.07%. During the week, the main index of the Dhaka Stock Exchange, ‘DSEX’, dropped by 144.72 points
“Amidst a dynamic week in the U.S. stock markets, where indices experienced a spectrum of movements, investors were met with a mixed bag of outcomes. While the Nasdaq Composite displayed a robust surge, bolstered by a significant hike of 184 points, other key indices such as the S&P 500 and DJIA demonstrated divergent trends. Despite the S&P 500 showing a negative trajectory, the DJIA Index witnessed a noteworthy ascent, reflecting the market’s resilience to certain headwinds.
However, amidst this volatility, smaller-cap indices like the Russell 3000 and Russell 2000 showcased their own distinct performances, hinting at underlying market dynamics. This nuanced overview encapsulates the multifaceted movements that characterized the U.S. stock markets during the week, offering insights into the varying factors influencing investor sentiment and market behavior.”
Reviewing the U.S. Stock Markets, the Nasdaq Composite, recorded a decent hike of 184 points, reaching a closing value of 16,340 points by the end of the week. Similarly, the S&P 500 index showed a negative trend, adding 95 points to settle at 5,222 points. Meanwhile, DJIA Index experienced a notable hike, adding 837 points during the week and concluding at 39,512 points after a week of gain.
In contrast, Russell 3000 Index saw a gain in week performance, with a slight hike of 52 points to reach 2,986 points by the end of the week.
Moving to Russell 2000 Index, demonstrated a notable gain of 24 points, ending the week at 2,059 points.
In the Outgoing week, the European stock market displayed a gaining performance.
Here is the data on the weekly performance of the European Stock Market, The STOXX Europe 600 index, which is considered a leading benchmark for the European market and covers approximately 90 percent of the market capitalization across 17 countries, reported a added of 15.23 points to close at 520.76.
The United Kingdom’s FTSE 100, one of the most widely followed indices in Europe, also showed a significant surge, adding 220 points or finishing the session at 8,433.
In Germany, the DAX 30 index, gaining by 771 points to reach 18,772, while France’s CAC 40 increased by 262 points to stop at 8,219 at the end of the trading day.
Italy’s FTSE MIB, which covers the top 40 stocks traded on the Milan Stock Exchange, increased by 1,028 points to 34,657. However, Spain’s IBEX 35, added by 251 points, to close at 11,105.
A review of South Asian stock markets shows that India’s Bombay Stock Exchange (BSE) index BSE Sensex has lost 1,214 points during the week. At the end of the week, the index stood at 72,664 points. On the other hand, the Nifty-50 index of the country’s National Stock Exchange gained by 420 points last week. At the end of the week, the index stood at 22,055 points.
Pakistan Stock Exchange Index ‘KSE 100’, adds 1,139 points last week. After a week of gaining, the index settled at 73,110 points.
On the other hand, The Sri Lankan stock market index hiked, and the Colombo Stock Exchange index ‘ASPI’ increased by 114 points in a week. After a week the index settled at 12,518 points.
Bhutan’s stock market index ‘BSI’ adds 9 points hence the index stood at 1,515 points throughout the whole week. Nepal’s ‘NEPSE’ lost 32 points, therefore the index stands at 1,966 points.
Hence Dhaka Stock Exchange: The benchmark index ‘DSEX’ added by 45.4 points or 0.81 percent, in the outgoing week. At the end of the week, the index stands at 5,661 points.
