Stock investors on edge over Covid surge

Stock investors are in a state of panic due to the sharp increase in Covid-19 infections across the country, leading to a downward trend in the market for the past two weeks.

Besides, the ongoing political unrest and announcement of a hartal have only exacerbated their anxiety.

Investors are mainly concerned about the economy deteriorating again due to the Covid-19 fallout as it could have a severe impact on the stock market.

"People are worried about the potential impact of a second wave of infections and so the market is falling," said Rezwan Islam, who has been invested in the stock market since 2015.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dropped 192 points, or 3.47 per cent, in the last week.

Many investors nearly lost half of their funds in the last year, Islam said. "So they became careful now."

Thirty-nine people died from Covid-19 in the last 24 hours, according to a press release issued yesterday by the Directorate General of Health Services (DGHS).

This is the highest number of deaths recorded in a single day due to Covid-19 in more than three months.

The total number of deaths has now reached 8,869 while the death rate stands at 1.5 per cent.

At least 3,674 new infections were recorded in the meantime, taking the total number of people infected to 591,806, according to the DGHS. The daily infection rate remained at above 3,500 for the fifth consecutive day yesterday.

The DSEX may have dropped due to mounting fears over the growing infection rate, said AB Mirza Azizul Islam, former adviser to the caretaker government.

As the Covid-19 crisis continues to gain steam, fear among investors is also rising.

"So, it may impact both businesses and the economy."

However, since the infection rate is still hovering around 3,500, nothing much is there to worry about yet as the index could bounce back if the situation subsides, he added.

While answering a querry, Islam, also former chairman of the Bangladesh Securities and Exchange Commission, said the recent political unrest may not last long and so it should barely have an effect on the stock market.

Covid-19 has impacted the whole economy and its recent resurgence has impacted the market, said Sharif Anwar Hossain, president of the DSE Brokers' Association.

Investors fear that the economy will be impacted again due to the increased infection rate.

"However, I don't think the political clash is going to be a big deal for the market because the agenda is not very important.

"If the pandemic gets worse again, the government should focus on bringing stocks of well performing companies to keep the market attractive," he said.

Quality stocks are the main remedy for the market in any situation because investors are always looking for good investment tools, added Hossain, who is also managing director of Sahidullah Securities.