#DSE faces sharp dip after day off

Stocks traded on the premier bourse of Bangladesh on Wednesday saw a precipitous fall.

The Dhaka Stock Exchange (DSE) general index slipped to 4695.57 points losing 168.72 points or 3.46 percent after the day's trading closed.

Shares worth Tk 3.16 billion changed hands, with losers outnumbering gainers 239 to 14. Two issues remained unchanged.

Only five minutes after trading resumed on Wednesday following Tuesday's suspension, the DSE general index lost 178 points. It started to rise afterwards and was on the positive zone at 12:45pm. The index, however, returned to the downtrend again after a few minutes and stood at 4784.89 points, with a loss of 79.40 points or 1.63 percent, at 1.37pm.


The DGEN plummeted 151.25 points, or 3.10 percent, to 4713.04 points after an hour's trading.

Meanwhile, retail investors started demonstrating in front of the DSE from 11am, demanding suspension of trading in the capital market until it stabilises. Chanting slogans, they demanded resignation of the prime minister and the Bangladesh Bank governor.

Traffic on the street in front of the DSE was kept stopped even after trading closed at 3pm.

'CONFUSION AND SUSPENSION'

Wednesday's trading started half an hour behind schedule after a day's suspension.

Fears of negative impact on the capital market, created by the 'confusion' over investment in stocks by public servants, forced authorities to suspend trading at both DSE and Chittagong Stock Exchange (CSE) on Tuesday.

The DSE board said the decision to stop Tuesday's trading was taken in the "interest of the investors" after two weeks of bearish run. The board closed ranks for an emergency meeting at 10am and the decision to pause trading came immediately afterward.

Trading on CSE was also paused about five minutes after the start on Tuesday.

After Tuesday's emergency meeting, chief executive officer of DSE Mosharraf Hossain said the suspension order was issued as the confusion over investment could impact the market negatively.

"Bewilderment has been noticed in reports published in several newspapers on investment in the capital market by government officials (civil and military)," Mosharraf Hossain told bdnews24.com on Tuesday. "The DSE authorities feel this may create confusion among investors and impact the capital market negatively.

"So trading has been halted in the interest of the share market and the investors."

ORIGIN OF 'CONFUSION'

The cabinet on Monday cleared a proposal to amend income tax law to reduce income tax on investments. Abul Kalam Azad, the press secretary to prime minister Sheikh Hasina, later said, "We know the capital market is risky. It is inappropriate for those in government service to be in such business."

The comment created confusion about whether the government was trying to prevent public officials from investing in the market.

Azad later told bdnews24.com that he had made "off the record" remarks about government officials investing in the market, and a misunderstanding was created with journalists on the issue.

The present law stipulates that public servants cannot be involved with any other profitable ventures, though they have been investing in the capital market by taking advantage of legal loopholes.
 
News Source: BD NEWS 24