Surveillance fear, year-end profit-booking spark 85-point DSEX plunge

Infographic: TBS

The stock market suffered its sharpest fall in months today (22 June), with investors rushing to sell amid concerns over stricter regulatory surveillance and year-end profit-booking.

The Dhaka Stock Exchange (DSE) lost around Tk6,000 crore in market capitalisation in a single session as sellers dominated trading from the opening bell.

The benchmark DSEX index plunged 85 points, or 1.51%, to 5,554, while the blue-chip DS30 index fell 35 points to 2,110.

Market breadth remained overwhelmingly negative, with 319 stocks declining, 36 advancing, and 34 remaining unchanged. Turnover on the DSE dropped 13% to Tk876 crore. Market insiders described the sell-off as being driven by a "surveillance ghost" haunting investors.

Following directives from the newly reconstituted Bangladesh Securities and Exchange Commission (BSEC), the DSE has strengthened its real-time market surveillance to curb manipulation. The bourse recently suspended trading in three companies over unusual price movements and launched investigations into rallies in at least seven other stocks.

Ashequr Rahman, managing director of Midway Securities Limited, said fears over real-time surveillance contributed to the market decline, although fiscal year-end portfolio adjustments were also a key factor.

"Institutional investors and high-net-worth individuals are liquidating holdings before the fiscal year ends on 30 June. They want to realise gains and recalibrate their investment strategies for the coming year," he told The Business Standard.

Ashequr said the DSE should establish transparent criteria for selecting stocks for investigation to avoid perceptions of bias and unnecessary panic among investors.

Saiful Islam, president of the DSE Brokers Association (DBA), said regulators are mainly targeting the manipulation of non-operational or "paper" companies that have repeatedly trapped retail investors.

According to Sheltech Brokerage Limited's daily market review, investor sentiment was also weakened by renewed geopolitical tensions and domestic political uncertainty. Selling pressure was evident from the start of trading as investors avoided taking fresh positions.

The pharmaceutical sector accounted for the largest share of turnover at 16.4%, followed by engineering and textiles. However, nearly all sectors ended lower.

The miscellaneous sector posted the steepest decline, falling 3.5%, followed by information technology and non-bank financial institutions. People's Leasing and Fareast Finance were among the top gainers, while Dominage Steel and Beximco ranked among the worst losers.

The bearish trend extended to the Chittagong Stock Exchange, where the CASPI index fell 167 points to 15,082. Turnover, however, jumped 145% to Tk74.42 crore, indicating heavy selling activity.