Continuous Decline in Stock Market Wipes Out Tk 723 Billion Since August

Economic Desk

The Dhaka Stock Exchange (DSE) saw its main index drop for the sixth consecutive day on Wednesday, reaching its lowest level in five years. Investors are alarmed by ongoing political instability, strict central bank regulations on banks and non-bank financial institutions (NBFIs), and restrictions on cash dividends.

Recently, Bangladesh Bank halted dividend payments for 2024 by 18 listed banks that had taken deferred provisioning benefits. Additionally, the central bank plans to merge or liquidate 20 troubled NBFIs, contributing to a significant decline in share prices in these sectors.

The DSE’s benchmark index dropped by 62 points or 1.34%, closing at 4,615 points. Over six trading sessions, the index has lost a total of 186 points. Since August 2024, following the fall of the Hasina government, the index has declined by 1,400 points, or 23%.

Market capitalization has also plunged by Tk 723 billion, standing at Tk 6.42 trillion from Tk 7.14 trillion in August 2024.

EBL Securities attributed the instability to pre-budget uncertainties and political unrest. The firm highlighted that high interest rates, reduced corporate earnings, negative equity impacts, and economic pressures have weakened investor confidence.

Sajedul Islam, Managing Director of Shyamal Equity Management, stated, “Continuous declines have triggered forced sales in many margin accounts, exacerbating the index’s fall.” He added that institutional investors are avoiding the market due to liquidity constraints, while retail investors are hesitant to make new investments.

Pressure to sell shares in banking, NBFI, telecom, engineering, and food sectors has heavily impacted the index.

Shares of Islami Bank, Walton, Al-Arafah Islami Bank, BAT Bangladesh, and Mercantile Bank accounted for one-third of the decline.

The DSE-30 index fell by 16 points to 1,708, while the Shariah-compliant DSES index dropped 16 points to 1,008.

Turnover also declined, dropping to Tk 2.65 billion from Tk 2.73 billion the previous day.

Of the 398 traded companies, 295 saw price declines, 63 recorded gains, and 40 remained unchanged.

Beach Hatchery was the most traded stock, with a turnover of Tk 104 million, followed by Fu-Wang Food, Orion Infusion, BRAC Bank, and NRB Bank.

The Chittagong Stock Exchange (CSE) also recorded declines, with the CASPI index losing 139 points to close at 13,025 and the CSCX index shedding 90 points to end at 7,943.