With the Covid-19 infection and death curves rising, Bangladeshi stocks faced a sharper fall on Wednesday following a two-day break with no sign of reversal.
DSEX, the key index at the Dhaka Stock Exchange (DSE), plunged by 84 points or 1.54% to close at 5,330.
The downfall was aggravated as edgy investors remained conservative on the bourse due to the recent rise in Covid-19 cases, wrote brokerage firm EBL Securities in its daily market recap on Wednesday.
Following two days of sharp fall, a meeting of top market intermediaries and the securities regulator managed to arrest the fall earlier this week and DSEX closed in green for two consecutive days.
The meeting discussed more buy orders from institutional accounts. But that seemingly did not work in the third session since the meeting of Monday.
Investors' caution resulted in a further sluggish turnover in the market as DSE registered only Tk580 crore in turnover, 8% lower than that on Tuesday.
Investors were looking for signs of market reversal but as soon as they observed the market going down again in the opening session on Wednesday, it further intensified nervous investors' panic.
At the end of the session, only 23 scrips at the DSE closed in green, while 234 declined and the price of 96 remained unchanged mostly as they are stuck at the floor price set a year ago.
As rescue forces lacked enthusiasm, the market kept heading down almost over the entire trading session.
No sector gained in market capitalisation, while General Insurance was the biggest loser with 4% contraction in market capitalisation.
The blue chip index, DS30, declined the most in terms of percentage points.
Trading turnover was significantly concentrated within fuel and power, pharmaceuticals, and miscellaneous. They each contributed to 13-15% of the DSE turnover on Wednesday.
Meanwhile, at the Chittagong Stock Exchange (CSE), broad indices CSCX and CASPI fell by 1.6%. Exceptionally, turnover at the port city bourse saw a 5.6-time hike to Tk177 crore.
Fall increases stocks' appeal
According to the daily market report of United Securities Research, the average price to earnings (PE) ratio of the DSE is now 14.62. This means on average, securities are priced at 14.62 times higher than the annualised earnings per share (EPS) of the same companies.
Annualised EPS is calculated based on the interim EPS of a company.
On the other hand, the market's average trailing PE ratio is at 15.87.
Trailing PE is calculated based on the average EPS of the previous four quarters, while PE ratio gives investors an idea of how many years they need to wait to get their investments back from the companies' annual profits alone.
The price to book value ratio is 2.17 now, which means market capitalisation is 2.17 times higher than the total net asset value of the listed companies.
But the market fall increased the appeal of stocks as the average dividend yield of listed companies at DSE is now 2.43, which was 2.39 on the previous day.
Dividend yield is the ratio between annual cash dividends and the market prices of shares.