The Dhaka Stock Exchange (DSE) continued its dramatic decline over a span of a fortnight, as market confidence plummeted causing both institutional and individual investors to maintain strong selling stances. The main index of the Dhaka Stock Exchange (DSEX) continued its steady decline from last week to end at its lowest in the last 3 years on Monday, 14th of October, 2019, ending trading at 4711.30 points compared to its highs of January 24, 2019 when it was at 5950 points.

The market has been experiencing a constant decline for almost a fortnight amidst a lack of confidence amongst investors and repeated unsuccessful attempts to stabilize the market from the market regulators. The short term attempted fixes have been largely unsuccessful.

DSE has been experiencing strong price corrections across the different sectors and this has been complemented by risk averse players in the market, causing shares in the large capital sectors to fall which in turn caused the market indexes to plummet. As confidence seems to wane in the market, both individual and institutional investors have been looking to sell outright with many remaining extremely cautious in injecting fresh funds into the market.

The downward trend has not only been experienced by local companies, with the shares of the listed Multi-National Companies (MNCs) also bearing the brunt of the downturn in market fortunes. Prominent MNCs such as Grameenphone, British American Tobacco (BAT) and Heidelberg cement have been witnessing falls in their share prices with drops in prices by 3.5 percent, 2.9 percent and 5.4 percent respectively on Thursday trading. Of these companies, Grameenphone and BAT have increasingly high market capitalization and as a result drops in their prices have a strong overall effect on the DSE's indexes.

The continued decline of the banking industry, with its constant pressing liquidity issues, including the lack of foreign investment in the capital market has been adding to the market woes. Various experts also attribute the downward movement of the market down to the lack of well governed companies being listed, with widespread malpractices in auditing of the listed companies in addition to the unusually hiked prices in newly traded stocks in the market.

The government and the central bank have taken steps in promoting more investment by the financial institutions in the market, but these have not had long lasting effects on the market as a whole.

There has always been concerns raised by industry insiders regarding the auditing of the listed companies, causing confidence issues with investors as there have been instances where companies' statements have wrongly valued its traded shares. As the prices of these companies correct over time, an overall downward trend is witnessed across the stock market, including the main indexes and most of the downturn do not follow market fundamentals, which also causes issues with overall investor confidence.

The lack of quality initial public offerings (IPOs) have also been the cause for concern amongst institutional and individual investors across the market. Many experts have been urging the regulators to display more transparency and strong governance in their stance in the market.

A number of newly listed companies have been seen to have hugely inflated initial public prices in the market, and this has been a growing concern amongst both local and foreign investors. Even though the government has voiced its concern against such malpractices, newly traded companies continue to have initial inflated prices in the market, which gradually and in some cases sharply decline, pushing the whole market down with it.

On Monday, the 14th of September, 2019, the DSEX fell to its lowest of 4711.30 points, which is a drop of more than 1 percent from the previous days trading. The index has been constantly decreasing by over 1 percent for each of the last 3 trading days, which further demonstrates the negative outlook of most of the market participants. In addition, it has been on steady decline for most of the last fortnight, with certain prominent investors hesitating to making fresh investments, whilst at the same time aggressively offloading shares.

The market turnover has also seen a steady decline over the same time period, with dramatic falls in turnover witnessed along with the sharp decline in prices in the market. The overall market turnover has failed to bounce back to the highs of June this year.

It is expected that this overall downturn and price correction shall eventually come to an end and stocks shall eventually display upward movements, however if the regulators do not step in strongly, many experts believe that the market shall again fall into such bullish circumstances. Although the government has voiced its concerns against some of the issues highlighted by experts, many expect stronger stances required in order to shift the market towards stronger fundamentals.