The country’s two stock exchanges -- Dhaka and Chattogram have passed the outgoing year of 2023 in a bearish trend throughout the year due to a lack of buyers of the shares and mutual fund units for various reasons including the dollar crisis, the Russian invasion of Ukraine, Israel-Gaza war, and political unrest in the country.
Many investors have already become capitalless as the price of most of the shares and the mutual fund units are at the bottom. There is no sign of an uptrend of these shares as investors have already passed the year without profit and losing capital.
Bangladesh Securities and Exchange Commission (BSEC) has taken various initiatives to revive the bearish market. However, all of their efforts have been ruined. No progress was visible in the Dhaka and Chattogram stock exchanges as a section of market manipulators played a game with the junk shares avoided by fundamental stocks. There was a crisis of index, transaction and capital withdrawal throughout the year. The amount of capital raised from the share market through Initial Public Offerings (IPOs) has also declined to one-third from the previous year. Nobody knows when the situation will improve.
Stock market concerned said investors are paying the price for the ongoing economic turmoil of the country. The stock market has lost its importance to the government due to high bank rates, dollar crises and political instability. There is no visible action by the authority to make the share market volatile. The continuous fall of the stocks has created a deep crisis in the market.
The fall of the share market started with the fall of the dollar last year. The BSEC had imposed a floor price (average price of a stock trading in the last five working days) to tackle the situation. Since then, the stock market has remained in the red. Although it goes bullish off and on, it is not enough to recover the losses of the investors.
The stock market was slightly bullish before June last year. But it was for a very short time and the market went bearish again which is being continued today. Market insiders said 2023 is the year of the biggest fall of the stock market after 2010. They, however, said the market will turn around very soon. In the meantime, the investors will have to hold their investments in their portfolios.
The market is falling daily. The price of all shares and units is declining gradually. Surprisingly, the prices of fundamental and blue chip shares also declined without any reason despite giving very good dividends. Investors become helpless in the current situation of the stock market.
Stock market analysts, however, do not see any logical reason for the current fall of the market. They said many fundamental shares are undervalued due to the continuous fall of the index.
Market concerned and investors think that the government wants to keep the market stable till the upcoming national election by upholding the floor price. The government will decide about the stock market after the election.
Meanwhile, the distribution of dividends of the listed multinational companies remains off in apprehensions of the dollar crisis. Earlier, the government has given various incentives for the well-being of the share market. But all are gone in vain.
Currently, several syndicates are active in the stock market and are controlling the price of the stocks. Economists and market insiders said there are two crises in the stock market. The number one is the lack of confidence of the general investors and the second is investors can’t sell stocks because of the buyer crisis.
@ The article was published on print and online versions of The Bangladesh Pratidin on December 31, 2023 and has been rewritten in English by Golam Rosul.
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