FE Report
Dhaka stocks closed sharply lower Sunday, as investors bent towards profit-taking on excuse of the securities regulator's measures to cool down the over-heated market.
Aside from the profit-taking, the market was thought to be dragged down by the central bank's order, limiting exposure of the commercial banks to the stock market.
The benchmark DSE General Index (DGEN) moved in and out of the negative territory throughout the day and at the end of the day. It closed at 6217.27, down by 1.30 per cent or 82.46 points, after hitting the day's high of 6354.23 and low of 6204.64.
The broader All Shares Price Index (DSI) lost 1.13 per cent or 59.09 points to 5151.26. The DSE 20 index comprising the blue chip shares shed 0.86 per cent or 31.86 points.
"Profit-takers have sent the market in the negative zone," said RY Shamsher, head of AB Investment Bank Ltd.
"The securities regulator's lowering the price-earning (P/E) ratio to cool down the market gave an excuse to the investors to book profit," he said.
Securities and Exchange Commission (SEC), in a directive issued Tuesday, ordered the merchant bankers and stockbrokers not to provide any credit facilities to their clients to purchase the securities with P/E ratio above 40 until further order. The directive has come into effect on the day.
A merchant banker said, "The central bank's setting capital market exposure limit has left negative impact."
On Tuesday, Bangladesh Bank issued a circular, asking the banks not to invest more than 10 per cent of their liabilities in the stock market.
However, turnover remained almost unchanged, as it closed at Tk 17.0 billion, slightly higher from the previous session's Tk 16.9 billion.
Across the board selling was seen, as out of 251 issues traded, 45 declined, 202 advanced and two remained unchanged.rameenphone gained 1.76 per cent, notching up its winning for the second straight session.
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