Stock investors have suffered in 2019 the worst year for stocks since the market crash in 2010-11 with the key index of Dhaka bourse losing 16.73 per cent in the outgoing year.
Market experts said that continued bleeding of the country’s financial sector with rising bad loans, poor governance in the capital market and the government’s apathy towards the market resulted in erosion of investors’ confidence.
DSEX, the key index of Dhaka Stock Exchange, plunged by 16.73 per cent, or 896.25 points, over in 2019 the worst year for stocks to close at 4,452.93 points on Monday, the last trading day of the year.
Although the market gained 62 points in the last three sessions as some investors continued with bargain hunting in the hope that the market would be better in the coming days, many others remained worried as there was no move from the government and the regulators to improve fundamental issues related to the financial sector and governance, market experts said.
After the December 30 general election in 2018, the market gained more than 700 points within three weeks in January this year, but lost the stream and never turned back.The market lost around 1,500 points in last 11 months’ rout that eroded almost Tk 80,000 crore in market capitalisation.The capital market also witnessed a 13-per cent fall in the previous year.Observing the overall market scenario in last two years, investors felt a pinch of the market crashes occurred in 1996 and 2010.Therefore, investors became panicky and rushed for an exit from the market.
Former Bangladesh Bank deputy governor Ibrahim Khaled told New Age on Monday that the market was unstable and sluggish in the year.Market regulator Bangladesh Securities and Exchange Commission completely failed to reform the market and the government must bring changes to the commission, he said.
He said that the government should appoint honest, efficient and firm people to the commission to develop the market.Former Dhaka University economics department chairman Abu Ahmed said that the market performed the worst in eight years.He blamed volatile banking sector, approving poor initial public offerings with huge placement shares and poor regulatory measures for the plunge.
He said the market’s turnaround would depend on positive export trend, relief of pressure on exchange rate, rise of foreign direct investment and credit flow to private sector.
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Information collect from Dhaka Stock exchange