Stocks plummet on bourses’ warning, SC ruling

Stocks prices at Dhaka and Chittagong bourses plunged on Sunday following the warning issued by chiefs of the bourses in the wake of overheated market and the Appellate Division’s ruling staying the high court order that had stayed the regulators’ directives on share credit and forced sales of share by investors.
   The general index of Dhaka Stock Exchange lost 187.80 points, or 2.51 per cent, to close at 7,229.54 points. It was the biggest single-day drop of the bourse’s key index after 204-point fall on July 25 this year.
   The selective categories index of Chittagong Stock Exchange shed 364.96 points, or 2.59 per cent, to finish at 13,708.64 points on Sunday.
   ‘The market fell sharply as the Securities and Exchange Commission is now allowed to enforce its directives on share credit and forced sales of shares after order of the Appellate Division of the Supreme Court,’ said Shakil Rizvi, president of the DSE.
   He said the corrections were necessary as the market rose sharply in the previous 11 trading days.
   Dhaka stocks opened the day’s trading with steep fall as investors started to offload their possessions after the chief of the bourses warned investors of huge losses in the wake of an overheated market at a press conference on Saturday.
   After the initial jolt, the market regained slightly only to drop heavily from 11:30am after investors came to know that the SEC got a Supreme Court stay in favour of its petition against a High Court stay order on its directives on September 27, DSE sources said.
   The DSE general index gained 437.11 points in 11 days since September 23.
   The authorities of the bourses at a briefing on Saturday also sought the prime minister’s intervention to offload shares of state-owned enterprises for cooling down the market.
   Small investors, however, criticised the timing of the bourses’ warning move and said the move was taken belatedly.
   ‘Small investors suffered most for today’s [Sunday] fall,’ said Omar Faruk, a small investor. ‘Authorities concerned should have taken steps earlier to protect the interest of small investors.’
   Another small investor Tanvir Ahmed said the bourses’ warning put psychological pressure on investors. ‘Small investors became panicky because of the warning and they rushed to offload shares,’ he said. ‘Sunday’s Supreme Court order also contributed to the selling pressure.’
   Salahuddin Ahmed Khan, a former chief executive officer of the DSE, said the corrections were needed. ‘The government should offload shares of SoEs to control the overheated market,’ he added.
   The daily turnover at DSE on Sunday stood Tk 2,364.76 crore, down by Tk 406.33 crore from the previous trading day.
   The DSE’s all shares price index shed 156.64 points, or 2.52 per cent, to finish at 6,067.49 points.
   Of the total 240 issues traded at the bourse, 212 declined, 25 advanced, and three remained unchanged.
   Premier Bank topped the turnover leaders with 1.62 lakh shares valued at Tk 99.76 crore traded on the day.
   The other turnover leaders were Exim Bank, Peoples Leasing and Financial Services, United Commercial Bank, Beximco, One Bank, Standard Bank, First Security Islami Bank, Shajalal Islami Bank and Square Pharmaceuticals.
   Fu-Wang Ceramic was the day’s biggest gainer, posting a 15.11-per cent rise in its share prices, while Imam Button was the worst loser on the day.