Higher year-on-year dividend declarations from four listed companies could do little to prevent the country’s stock market from making a drop yesterday.
The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), fell 2 points, or 0.05 per cent to 5,327. The day before, the market had come down by 83 points. The stock market is being downed by apprehensions over the spread of Covid-19 infections, said a top official of a stock brokerage firm.
The impact of the dividend declarations was not strong enough to cushion the whole market, he said. Provati Insurance Company, National Housing Authority and Jamuna Bank declared dividends of 17 per cent, 15 per cent and 17.5 per cent respectively for 2020.
All the financial institutions are providing higher dividends this year compared to that the previous year. Aman Cotton Fibrous also declared 10 per cent cash dividend for the year ending on June 30, 2020.
Actually stocks investors are in panic for the pandemic because they fear that the situation may deteriorate, said the stock broker.
If the pandemic spreads again, there will be an impact on the performance of almost all the companies, he said.
There are some other reasons for the market falls, said a merchant banker.
He alleged that some big players were spreading rumours that the market might fall. This was an attempt to fool general investors into selling off their shares, which would lower prices for the players to then make purchases, he said.
So general investors should not pay any heed to rumours and hold onto their shares, especially if those are of companies with good performance records, he added.
Meanwhile, Bangladesh Merchant Bankers Association has urged the Bangladesh Securities and Exchange Commission (BSEC) to allow more time before implementing a January directive.
On January 13, the BSEC ordered that the spread, meaning the difference between the cost of fund for margin loans and interest rate on lending, would have to be kept within 3 percentage points and that this had to come into effect from February 1.
Later, in another circular the BSEC extended the activation date to July 1.
Now, the BMBA is urging for the BSEC to allow the directive to be implemented from June 30, 2022.
At the DSE, 129 stocks rose, 81 declined and 132 remained unchanged.
Turnover, an important indicator of the market, dropped more than 15 per cent to Tk 488 crore.
NRB Commercial Bank topped the gainers’ list, followed by GBB Power, Bangladesh National Insurance Company, eGeneration and Imam Button Industries.
Beximco topped the turnover list with trade worth Tk 61 crore followed by Beximco Pharmaceuticals, Robi Axiata, LafargeHolcim Bangladesh and Square Pharmaceuticals.
First Finance shed the most, falling 7.24 per cent followed by Aman Cotton Fibrous, LafargeHolcim Bangladesh, Republic Insurance Company and C&A Textiles.
The port city bourse also fell yesterday.
The CASPI, the general index of the Chittagong Stock Exchange, dropped 1 point to 9,424.
Among 208 stocks to witness trade, 80 advanced, 63 dropped and 65 remained unchanged.