Blockade hits Bangladesh stocks as prices, indices fall

Bangladesh’s stock market has started the week with downward indices and falling prices of shares as the political crisis deepens.

Chief Economic Correspondentbdnews24.com
Published : 25 Jan 2015, 04:14 PM
Updated : 25 Jan 2015, 04:14 PM

Stakeholders blame the current political turmoil for the situation.

The two stock exchanges have been suffering a fall in indices, prices and turnovers almost every day since a blockade the BNP-led alliance called on Jan 5.

Small investors are frustrated over the situation.

On Sunday, the Dhaka Stock Exchange (DSE) index, DSEX, dropped 81 points to 4,716.

On Chittagong Stock Exchange (CSE), the main index, CSEX shed 279 points to 14,450.

In the past 25 days, the main DSE index lost 250 points while the daily turnover dropped to Tk 2 billion.

Market analysts say it is 'natural' that the current situation of Bangladesh would affect the stock market.

They expressed apprehension over the outcome of the situation.

Former chairman of market regulator Bangladesh Securities Exchange Commission (SEC) AB Mirza Azizul Islam said it was 'foolish' to think that the stock market would be normal in such a situation.

"There is no good news. Disappointments, anarchy, violence have gripped everywhere," he said.

Islam, also former adviser to a caretaker government, said everyone had hoped that the stock market would turn around in the new year.

Trading in the end of the last year had showed a good sign but expectation had been belied by the political violence, he said.

"The most worrisome thing is that no one knows when the situation will calm down. There is no such sign. The economy has collapsed. Now the stock market is only reflecting what is natural in such a situation," Azizul Islam said.

CSE Chairman Muhammad Abdul Mazid said everyone had been “alarmed” as Bangladesh's economy was facing uncertainty due to the indefinite blockade.

Both institutional and individual investors were keeping a close watch on the situation which impacted the indices daily, he said.

Of the shares traded on DSE on Sunday, prices of 82 percent companies fell. The number was 78 percent on the CSE.

The turnover at DSE was Tk 2.23 billion.

Of the 307 traded shares and mutual funds, prices of 252 dropped and 34 increased while 21 remained the same as on the last trading day.

CSE saw a turnover of Tk 230 million.

Of the 233 shares and mutual funds traded on the market, prices of 182 dropped, 36 increased and 15 remained unchanged from the last trading day.

IDLC Investment Limited Managing Director Muniruzzaman said, "The investors do not see any hope of a political agreement. The news of companies making losses is coming in, impacting the market."

The investors, panicked by the political violence, were not taking part in trading leading to low turnover, former president of Bangladesh Merchant Bankers Association Mohammad A Hafiz said.

Former DSE chief Ahmed Rashid Lali said the central bank's tight monitoring was also impacting the market. "The institutional investors are shunning trading for this," he said.

Investor Ruhul Amin Akand said they were waiting as the Bangladesh Bank was scheduled to announce the new monetary policy on Jan 28.

"The investors are watching the situation carefully," he said.