Mgt 372 Sec 2 Faculty : Shahid Hossain

Date: 06/02/12 EHSAN KARIM ID# 101 0347 030 G.M. AFTABUR RASUL ID# 091 0331 530 RAJIB IQBAL ID# 083 0333 530

Journal 1
STOCKS PLUNGE FOR THIRD DAY

Summary : Share prices declined for a third day with turnover at a three-year low on the Dhaka Stock Exchange, due to lack of investor confidence. Turnover on the premier bourse slipped 37.5 percent to TK 168 crore, compared to the previous day. The benchmark General Index of DSE lost 1.07 percent or 41.53 percent to close at 3,845.65 points. The market gained 74 points at 11:20am but finally closed negative due to massive sell-offs.

Analysis : Market analysts said institutional investors acted like small investors and low institutional buying was responsible for accelerating the fall in share prices. Finance Minister AMA Muhith on Wednesday asked banks and insurers to fulfill their commitments to the Stock market. Banks and insurance companies must fulfill their commitments they made during their meeting with the prime minister. Prime Minister Sheikh Hasina held a meeting on November 16 last year at Gono Bhaban with Stock market stakeholders in an effort to stabilize the market.

Analysts said the frustrated investors went for massive selling of shares to save their money, who were expecting some policy measures to increase the credit flow to the market. Green Delta LR Holdings said in its daily market analysis, The DSE continued its downward ride as selling pressure continued to overwhelm the index throughout the trading session.

Among the major sectors: banks lost 1 percent and non-bank financial institutions 1.78 percent, while pharmaceuticals and power lost in excess of 1 percent. Grameenphone, which represent the telecoms sector, rose 1.09 percent. The Chittagong Stock Exchange slipped with the Selective Categories Index losing 148 points or 2 percent to end the day at 7,147.14. Losers beat gainers 152 to 24, with eight securities remaining unchanged on the port city bourse that traded 85.11 lakh shares with turnover of TK 31.62 crore. Conclusion: To get back the market in it's normal trend government must act to gain customer confidence. It must also assure secured investment for the investors. Banks and other large scale companies such as insurance must be encouraged to play a significant role to stabilize the unpredictable market. As the large companies takes measures to uniform the market, so will the small investors follow their foot step. Transparency can be another key element to recover customer confidence. Faulty statements from icon players and government bodies to manipulate customer thinking should be actioned by law. Introduction of new companies can be another good measure to gain market index. Government should work on aliening new companies and mnc's into the market. Domestic firms such as the garments industry might act a great deal to stabilize the stock market, if they can be introduced. Lastly, investors should understand that the stock market all over the world is a very unpredictable investment option and as such should have a diversified portfolio.

Source : The daily Star (Business) Website - http://www.thedailystar.net/newDesign/news-details.php?nid=220955