SHARE prices continued to fall at Dhaka Stock Exchange for the third day with the key index of the bourse shedding 2.16 per cent or 87.54 points on Monday as the investors remained panicky due to political tension surrounding the controversial city polls. DSEX, the key index of the bourse, went below the psychological benchmark of 4,000 points, closing at 3,959.73 points on the day which was the lowest since 3rd November 2013 of 3,993.33 points.
The DSEX lost 325 points in previous two weeks as the investors remained fearful about the heated up political situation surrounding the City Corporation polls. The turnover of the bourse also came down to Tk 330.44 crore on Monday compared to that of Tk 382.31 crore in the previous session.
Market operators said investors became more pessimistic about the market following the widespread anomalies in the city polls, fearing that the political tension might not ease in the near future.
They also said that in the backdrop of political chaos, lack of participation of the institutional investors was deepening the crisis.
The continuous slide of stock markets has made securities regulators worried, forcing it to call an urgent meeting with the stakeholders on Monday evening. The Commission asked the stakeholders – brokerages and merchant banks – to support the market for few days to bring back investors confidence from the brink. Stakeholders were also urged to begin counseling investors to expel their fear of further falls in share prices. Representatives of brokerage firms and merchant banks described the current market situation and some difficulties faced by them while putting funds in the market. They also recommended to take measures including removing regulatory barriers of banks exposure and allowing to open more brokerage firms.
It is fairly obvious that the confidence of the retail investors has been shaken due to the volatile political situation. However it is also true that the poor corporate disclosures also affected the market as the companies had a hard time in the first quarter due to the continuous political blockades and hartals which took place. Another factor which had an effect was the active participation of the institutional investors as they were not stepping in due to policy constraints imposed by the Bangladesh Bank. Added to all these factors is the lack of attention given to the premier bourse in the country by the government.
Solution is not too difficult if an atmosphere of political tolerance could be created. The unstable politics is helpful for unscrupulous financial dealers. In our country bad politics is driving away good economic activities.
