Bangladesh’s stock market endured another week of losses as all indices, share prices of most companies, and overall turnover declined, leaving investors frustrated after two consecutive weeks of downturn.
According to the Dhaka Stock Exchange’s (DSE) weekly review, the benchmark index DSEX shed 73 points over five trading days. The index, which began the week at 5,523, closed at 5,449.
The other two indices also suffered losses. The Shariah-based DSES fell by 18 points, while the blue-chip index DS30 declined by 43 points.
Week-on-week, the DSES dropped by over 1.5 percent, while DS30 fell by more than 2 percent.
Compared to the same period last year, the market, however, remains in a relatively better position.
Year-on-year, the DSEX has gained over 4 percent and DS30 over 8 percent, although the DSES showed no significant change.
Investor disappointment was reflected in the sharp fall in daily turnover. The average daily transaction, which used to hover above Tk 1,000 crore, dropped to Tk 700 crore during the week. Share and unit trading volume fell by 39 percent in a week.
“Though the market had been performing well for a few weeks, it has once again taken a downturn. At this stage, a rebound is crucial, as prolonged decline will deter large investments,” investors told.
Tariqul Islam, who has been trading for nearly a decade, said, “Ups and downs are part of the market. The problem is when Tk 1,000 crore turnover suddenly falls to Tk 700 crore. A sharp fall in transactions, good companies losing value, and bad companies gaining activity erode confidence. Just a few days ago, small investors like us started reinvesting as the market was rising, but now many are thinking of pulling out again.”
Another investor, Sajeda Akter, observed, “For over a year, the Commission has been working on reforms. But whenever the market declines, weak companies tend to dominate. Many firms without any production still see share price hikes due to insider trading.”
Several investors demanded the introduction of a buy-back law to delist non-performing firms. Ruhul Amin, one such investor, said, “A few shell companies are dragging the market down. They should not have been listed in the first place. A buy-back law is needed to remove them.”
Among 21 sectors, prices fell in 20, with housing being the only exception, though the rise was negligible. Major sectors including banks, financial institutions, insurance, and energy experienced steep declines.
The banking sector dropped by over 17 percent, non-bank financial institutions by 54 percent, general insurance by 70 percent, and life insurance by 57 percent.
The energy sector declined by more than 57 percent, telecom by 59 percent, and pharmaceuticals by 22 percent.
Of the companies traded on the DSE during the week, prices rose for 68, fell for 306, and remained unchanged for 23.
Brokerage houses noted that recent penalties and restrictions imposed by the Bangladesh Securities and Exchange Commission (BSEC) had a negative impact on the market.
They argued that whenever the regulator imposes mass fines or sanctions in a hurry, the market tends to crash.
Speaking anonymously, a branch in-charge of a brokerage house in Motijheel said: “The Commission often takes big steps suddenly.
But whenever they do so, the market falls. They need to understand that the stock market is fragile and cannot withstand pressure. Reforms must be gradual.”
A member of the capital market reform taskforce, also requesting anonymity, echoed the sentiment, “We always advised the Commission not to push for sudden large changes. Such moves directly hit investors and destabilize the market further.”
Similar to Dhaka, indices at the Chittagong Stock Exchange (CSE) also fell. The broad index CASPI lost 182 points, while the selective indices CSE-30 and CSE-50 declined by over 1 percent.
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At the CSE, 312 companies were traded. Prices rose for 89, declined for 195, and remained unchanged for 28.
Market insiders said unless good companies are listed and weak ones are removed, no reform effort by the Commission will bring stability.