The Dhaka Stock Exchange (DSE) benchmark index has reached its lowest level in over four months, with experts attributing the decline to a crisis in investor confidence amidst policy rate hikes and prevailing economic challenges. Last week, the DSEX index further extended its downward streak, closing at 5,115 points, marking a 143-point fall – or 2.73 percent – from the previous week. The current level is the lowest recorded since June 12, when the index stood at 5,083 points. Over the last five consecutive weeks, the DSEX has shed a total of 616 points. Analysts have linked this ongoing decline to the recent interest rate hike implemented by the Bangladesh Bank, which increased its policy rate to 10 percent. This measure, coupled with rising political uncertainties, has added to investors' bearish outlook, intensifying the selling pressure on DSE. Dhaka Stock Exchange: Investors increase selling pressure amid fluctuating index Despite regulatory efforts to bolster investor confidence through stakeholder meetings, the pessimistic sentiment has persisted, causing a broader market sell-off. Despite the overall market decline, trading activity rose modestly, with weekly turnover climbing by 6.5 percent to Tk 338 crore from Tk 318 crore in the previous week. Investors showed the most interest in the banking sector, which accounted for 22.7 percent of total turnover, followed by pharmaceuticals (16 percent) and food (11.2 percent). All sectors, however, closed in the red, with the paper sector suffering the largest loss of 11.9 percent. Concerns over large-cap stocks intensified as prominent companies, including Square Pharmaceuticals, Grameenphone, BRAC Bank, British American Tobacco, National Bank, Robi, and Olympic Industries, collectively contributed to a 56-point reduction in the index, according to EBL Securities. This week, the DSE witnessed Tk 123 billion wiped out from its market capitalisation, which now stands at Tk 6,568 billion. Over the past five weeks, the market capitalisation has contracted by Tk 365 billion, raising concerns about the stability of the stock market in the coming months. The blue-chip DS30 index – comprising 30 of the most prominent companies – also lost 51 points to settle at 1,879, while the DSES index, which represents Shariah-compliant stocks, fell 30 points to close at 1,144. Dhaka Stock Exchange sees mixed early trading Expert Views and Economic Challenges Professor Abu Ahmed of Dhaka University highlighted broader economic challenges, noting that the country’s economic trajectory has been compromised over time. “After the recent political developments, reform activities are in motion, which is essential for sector stability. The government is actively working towards implementing policies that will foster sustainable business and economic activities, which should ultimately lead to a market recovery,” said Ahmed, who also serves as Chairman of the Investment Corporation of Bangladesh (ICB). Dr M Masrur Reaz, former senior economist at the World Bank, added that the market’s recent performance also reflects a shortage of quality stocks. “The lack of strong stocks, coupled with instability across sectors like money and financial markets, has dented investor trust,” Reaz explained, adding, “Once these issues are addressed, investor confidence can be restored.” As the DSE continues to navigate these economic and policy headwinds, stakeholders remain hopeful that sustained policy reforms and economic stabilisation efforts will help rebuild market confidence.

Stocks in Dhaka saw a sharp decline last week, with the DSEX falling below 5,300 for the first time in three months as anxious investors sold off to prevent further portfolio losses. The market remained dominated by sellers throughout the week, extending its losing streak for the fourth consecutive week. The market started the week in free fall, hitting session lows across all four days as retail investors, in particular, engaged in panic selling. The main index of the Dhaka Stock Exchange (DSE), DSEX, finally settled at 5,258, down over 164 points or 3.03 percent from the previous week. The DSEX has lost 476 points in the last four weeks. Read more: Small investors’ woes in stock market not over yet Investors concerned continued to shed their holdings after noting that heavy-weight issues, including mutational companies, continued to fall in the past few weeks, putting further pressure on indices. Investors preferred to trim their equity exposures and adopted a wait-and-see approach amid uncertainties surrounding earnings declarations for June-ending companies. Macroeconomic and regulatory uncertainties also acted as negative catalysts that ignited the selling spree, allowing the bears to retain control for a prolonged period. DSEX, the broad index of the Dhaka Stock Exchange, lost 164.1 points, or 3.0 percent, to settle at 5,258 points. Investors' participation in the market continued to fall by 13.3 percent to TK 3,180 million as compared to TK 3,667 million in the previous week.  Read more: BSEC Chairman urges stakeholder cooperation for stock market reforms Investors were primarily active in the banking sector (20.4%), followed by the pharmaceutical sector (16.5%) and the IT sector (11.3%). Sectors closed in the red, with the services sector (-8.8%) experiencing the largest decline. Five large-cap stocks such Islami Bank, Brac Bank, British American Tobacco, Renata and Beacon Pharma together accounted for one-fourth of the index's decline during the week, according to EBL Securities. This week, Tk 52 billion was wiped out from the market capitalization of the DSE, which now stands at Tk 6,691 billion. Over the past four consecutive weeks, the market capitalisation has declined by a total of Tk 242 billion. The market capitalisation is calculated by multiplying a company’s total number of outstanding shares by its current market price. Read more: Share Market Investment Guide: How to Invest in Stocks in Bangladesh The blue-chip DS30 index, a group of 30 prominent companies, also lost 54 points to close at 1,930 while the DSES index, which represents Shariah-based companies, shed 32 points to 1,174.

Small investors in Bangladesh’s stock market remain trapped, with their woes persisting due to a lack of confidence, weak governance and economic instability, despite assurances from regulators of an eventual market rebound, according to experts. “No one, not even the regulator or stock market authorities, pays heed to our screams,” said Saiful Islam, a grocery owner and one of the affected investors,” in a broken voice while talking to UNB regarding the capital market. Saiful invested Tk 14 lakh in 2010 to buy shares of different companies listed in the Dhaka Stock Exchange (DSE). Dhaka stocks drop in early trading today After graduating in 2004, Saiful found no suitable job and then started a small business in the Motijheel area in 2007 with support from his father-in-law. He made a good profit in the business and invested the money in the share market. In 2010, Saiful invested around Tk 14 lakh, of which Tk 6 lakh was his own and Tk 8 lakh he borrowed from relatives. All of his investment was stuck in shares of different companies due to a major scam in the capital market in 2011. Like Saiful, thousands of investors lost their hard-earned capital in 2011, and after that, some were able to regain part of their capital. However, most of them left the capital market, losing nearly all their investment. Many such investors are still in the market, hoping for a rebound in the DSE, but without any good news. DSEX drops by 43 points as prices of 288 companies fall, Chittagong Stock Exchange follows suit There is no sign of lifting the floor price before the next election. However, economists say that people do not have confidence in the market. The BSEC advises investors to remain patient. Analysts say that the small investors’ woes in the capital market are unlikely to end before the national election as their wait for a good time is prolonged by Bangladesh’s recent ‘instability’. The small investors’ shares were once stuck at the floor price (minimum sale rate) due to the overall economic downturn. The floor price barrier ended after the change in government in Bangladesh. However, the prices of most companies' shares have not increased to the desired level for small investors. Dhaka Stock Exchange sees early week gains This has been painful for many unfortunate small investors in the capital markets, according to market analysts. Policymakers and the Bangladesh Securities and Exchange Commission (BSEC) paint a rosy picture for small investors, saying that the stock markets will rebound with the enlistment of new companies and the injection of large investments. However, the situation for small investors seems hopeless. A large number of shareholders have been stuck with their investments in the capital market for over a decade amid fading hopes. Experts' Analysis Dr ABM Mirza Azizul Islam, an economist and former adviser of a caretaker government, told UNB that there has been a crisis of confidence among investors in the stock market for a long time. “To this are added various economic crises, the international situation, and everything, including elections and national politics. As a result, first of all, steps should be taken to eliminate the trust crisis. In this case, trust should be ensured by establishing good governance,” he added. Dhaka Stock Exchange slips below 5,400-point as Islami Bank shares plummet nearly 10% “That means investors have to be assured that if someone steals their money through manipulation, they will be prosecuted. Besides, the supply of good shares should be increased. Through these two steps, it is possible to solve the market problem. But it is not easy at all,” said Dr Azizul Islam. Dr Abu Ahmed, Chairman of the Investment Corporation of Bangladesh (ICB) and former professor of Dhaka University’s Economics Department, said there are two crises in the market: one on the demand side and the other in investor confidence. On the supply side, he said, the problem is that there are fewer good companies. As a result, it is a win-win situation for manipulation and syndicates. “All in all, the stock market is currently in an unstable condition and the situation is gradually getting worse. The passage from here is very difficult,” he said. Ahmed also noted that people are sometimes investing in weak shares with the expectation of a big profit, which is not the right way of investing due to a lack of financial literacy. Read mnore: Share Market Investment Guide: How to Invest in Stocks in Bangladesh