Stocks take a nosedive

Stocks on the Dhaka bourse took a massive tumble yesterday after news broke that the banking sector is facing a high rate of bad loans, according to market players.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), lost 95 points, or 1.35 per cent, to 6,917. The index had shed 78 points collectively over the previous three days.

Despite being the highest capital-based sector, banks displayed the worst performance, slipping 2.50 per cent after news of increased bad loans and a cash crunch at several banks saw the light of day, analysts said.

As of September this year, non-performing loans stood at Tk 101,150 crore, up 14 per cent from nine months earlier and 7.1 per cent year-on-year, Bangladesh Bank data showed.

As the banking sector has huge capital base, its bleeding had a massive impact on the overall index.

Banks dominated the turnover chart yesterday, contributing 34.71 per cent. However, the turnover dropped 14 per cent to Tk 1,129 crore, from Tk 1,314 crore the previous day.

Similarly, all other sectors, sans tannery and paper and printing, fell as well.

"A perception has been created among investors that the key index will move between 6,800 points and 7,300 points, so they sell shares when the index is close to the 7,300 level," a stock broker said.

On the other hand, some investors were quite shaky as they think that the money market is under some liquidity pressure.

"If the money market suffers from a liquidity challenge, then it spills over to the stock market," he added.

At the DSE, 75 stocks advanced, 259 fell, and 31 remained the same.

Shurwid Industries topped the gainers' list, rising 9.92 per cent, followed by Acme Pesticides, Sena Kalyan Insurance, Tosrifa Industries, and Mithun Knitting.

LR Global Mutual Fund One shed the most, dropping 10 per cent, followed by Kattali Textile, Bangladesh Industrial Finance, Gemini Sea Foods, and Premier Leasing.

One Bank was the most traded stock with its shares worth Tk 108 crore changing hands, followed by Beximco Ltd, IFIC Bank, First Security Islami Bank, and Delta Life Insurance.