Financial Sector Experiences Continued Decline Amid Capital Market Turbulence
The financial sector saw a continued decline as unfavorable conditions persisted in the nation’s capital market yesterday. The main index, DSEX, suffered a drop by 38.7 points resulting in its closure at an all-time low of 4,746. This extreme fall is a consequence of the ongoing political turbulence and economic instability. The majority of the listed stocks experienced devaluation due to consistent selling pressure, as investors tread cautiously amidst the ongoing market unpredictability.
The Dhaka Stock Exchange (DSE), an important indicator of economic activity, witnessed a slight increase in turnovers by 10% which amounted to Tk278 crore. This occured after a significant dip to a ten-month low last Thursday. Out of the total stocks traded today, 271 saw a reduction in their prices, whereas the prices for 74 went up and 52 maintained the status quo, based on the data provided by DSE.
The DSES index, representing the Shariah market, experienced a drop by 9.66 points, putting it at 1,037. Meanwhile, the DS30 index, often considered to include ‘blue-chip’ or reliable performers, took a hit of 23.80 points, ending at 1,753. Both indices painting a grim picture of the capital market, with the DSEX continuing to spiral downward.
Such a bearish trend deepens the growing uncertainty in the financial realm here. There is no apparent sign of relief from the protracted market slump, with the DSEX descending to another all-time low this past Saturday. Despite an initial wave of optimism in the starting period of the session, the strong hold depreciating trend prevailed. The investing community remains apprehensive about the future prospects and prefers to steer clear of any activity, thus perpetuating the underlying gloominess.
The stagnation continued in the realm of trading activities of the DSE with total turnovers remaining limited to Tk278 crore. A sector-wise breakdown tells us that the banking sector stood out with the highest impact on turnovers, contributing to 26.2% of total turnovers. It was followed by the sectors of food and textiles that added to the total turnovers by 10.0% and 9.7% respectively.
The upward outliers during this period were Atlas Bangladesh, Shinepukur Ceramics, and S Alam Cold Rolled Steels. Atlas Bangladesh headed the list of gainers with an impressive increase in its share price by 9.98%, making it to Tk57.3 per share. Shinepukur Ceramics trailed closely with a rise of 9.90% in share costs, leading to a final price of Tk23.3 per share. Similarly, S Alam Cold Rolled Steels saw a bump in its share price by 9.74%, concluding at Tk21.4 per share.
Among the banks, City Bank, Pubali Bank, Mutual Trust Bank, and Dutch-Bangla Bank experienced the most significant price drops, with their shares declining over 10%. The plunge in the stock price was a consequence of the adjustment for the stock dividend for the year 2024.
City Bank saw the steepest decline with its share price dropping by an alarming 16.66% down to Tk19 each. Closely following suit was Pubali Bank with a decrease by 14.73% making its shares cost Tk24.3 each. Meanwhile, Mutual Trust Bank experienced a 12.71% drop, resulting in its shares reducing to Tk10.3 each. Dutch-Bangla Bank was not far behind as its shares fell by 10.56% to Tk38.1 each.
The negative trend was not just limited to the capital but its ripples were felt in the port city as well. The Chittagong Stock Exchange (CSE) also found itself immersed in the red territory. Both indices used in CSE – the Selective Categories’ Index (CSCX) and the All Share Price Index (CASPI) experienced a fall.
The CSCX observed a decline by 54.1 points whereas the CASPI fell by 91.5 points in this period. This exhibits the far-reaching effects of the current financial conditions resonating through the entire country.
As investors wait in the wings during this tumultuous time, the national capital market is struggling for recovery. Although a glimmer of optimism was noticed at the start of the recent trading sessions, the dominant downtrend soon suppressed it.
The financial landscape remains clouded with investors apprehensive about the duration of the downturn. This cautious sentiment has contributed to the prevailing stagnation in trading activities and the overall market is waiting for an upturn.
While the banking sector appears to be witnessing considerable activity, other sectors like food and textile are also contributing to the turnovers. Despite this, some companies are managing to successfully navigate these rough waters, indicating that investment opportunities can still be found, even amidst such challenging circumstances.