The New Nation - Internet Edition

UNB, Dhaka

Shares on the Dhaka Stock Exchange (DSE) suffered worst setback in last four years as the benchmark index dipped to a 15-month low allegedly due to the World Bank's forecast of a poor economic growth waiting ahead as the fallout of global recession.

The DSE General Index (DGEN), the benchmark index, shed 100 points or about 4 percent to close at 2,459 from 2,559 points on Wednesday, with shares falling sharply across the board.

Earlier, DSE recorded the worst single day fall of 133 points on January 11, 2005 while the benchmark index at yesterday's level was recorded at 2,455 points on August 29, 2007. Of the total 238 issues traded on the day, 231 issues suffered losses while only five registered gains and two remained unchanged.

Stockbrokers, merchant bankers and investors attributed the World Bank's projection on the economic growth as adding to the existing reasons, including uncertainty over election and global recession, apparently telling upon the investors' patience.

Finance Adviser Dr Mirza Azizul Islam and Bangladesh Bank Governor Dr Salehuddin Ahmed have, however, brushed aside the World Bank forecast saying that they expect a growth close to the official target of 6.5 percent despite global recession.

Talking over telephone, DSE CEO Dr Salahuddin Ahmed told UNB that he was informed that the brokers, merchant bankers and investors blamed the World Bank projection for the negative impact on the capital market.

"I don't see any justification for the GDP growth to drop to that level," he said, adding that figures from Bangladesh Bank on major indicators do not indicate anything alarming. The DSE chief executive said the remittance, exports and agriculture have been performing well despite the global financial turmoil. "By no means, I can agree with the World Bank projection."

A stock market operator, requesting anonymity, smells rat in the World Bank projection as the country's economic growth estimate was prepared by Indian national Vinaya Swaroop, who is the lead economist at the World Bank's Dhaka office.

"An Indian national will not want to see foreign investment coming to Bangladesh where the economy remained stable despite the global turmoil," he said.

An asset manager, however, said that the worst slump in the capital market was nothing but an outburst of the investors, who were gradually losing confidence on the market due to different reasons that emerged one after another.

"One of the main reasons for such fall may be attributed to excessive dependence on credit," he added.

At the close of the day's trading, the All Shares Price Index (DSI) fell 82 points or about 4 percent to 2,035 from 2,117 points on Wednesday while the DSE-20 index of selective shares dropped 73 points or over 3 percent to 2,101 from 2,174 points. The day's total turnover, however, increased to Tk 2.62 billion from Tk 1.80 billion on Wednesday while market capitalization declined to Tk 948 billion from Tk 976 billion.

Shinepukur Ceramics, Beximco Pharma, Uttara Bank, Titas Gas, Beximco, ACI Limited, Square Pharma, GRAMEENS2, Brac Bank and AB Bank were the day's turnover leaders in terms of value.

The day's volume leaders were Shinepukur Ceramics, AIMS 1st Mutual Fund, Beximco Pharma, Beximco Textiles, GRAMEENS2, Beximco, Keya Cosmetics, Golden Son, BD Com and Agni Systems Limited.

Top gainers of the day were Shinepukur Ceramics, Kohinoor, Amam Sea Food, Renwick and Northern Insurance.

Shyampur Sugar and AMCL (PRAN) were the top two losers of the day each incurring about 15 percent losses, followed by Beximco, Agni Systems Limited, Zeal Bangla, Kay & Que, Prime Finance, East Land Insurance, Golden Son and BD Com.