Stock market feels heat of energy crisis as well
Graphics: Agamir Somoy
The country's premier bourse, the Dhaka Stock Exchange (DSE), experienced a severe bearish sentiment last week. The benchmark index fell on four out of the five trading days, erasing approximately Tk 3,803 crore from the overall market capitalization. Alongside the decline in indices and market value, trading activity also dropped significantly over the week.
Persistent gas shortages have raised serious concerns about production disruptions at listed manufacturing companies, including textiles, dyeing, ceramics, and steel plants. If factories cannot operate at full capacity, corporate earnings are expected to plummet, which could ultimately deal a heavy blow to the nation's two primary foreign currency earners—export revenue and international trade. These fears have severely dented investor confidence, and the negative impact has reverberated across the entire market.
At the beginning of the week, proposed amendments to the final margin rule kept investors cautious and anxious. Although necessary clarifications regarding the margin rule were provided by midweek, lingering rumors of stringent regulatory measures meant that hesitation and doubt among investors did not fully dissipate.
At the same time, the unresolved national gas crisis fueled growing fears of a negative impact on corporate profitability, prompting investors to accelerate their selling spree. Although the market attempted a modest recovery toward the end of the week, weak investor sentiment persisted due to multiple domestic challenges and geopolitical uncertainties, preventing any significant buying momentum from taking hold.
According to DSE data, only 52 companies' shares and units saw price increases throughout the week. In contrast, 314 companies recorded price declines, while 18 remained unchanged. Affected by the broad-based price drops, the DSE's market capitalization stood at Tk 7,03,812 crore at the close of the last trading day, down from Tk 7,07,615 crore in the previous week—a net erosion of Tk 3,803 crore in just five days.
The index figures paint a similar picture: the DSE's benchmark DSEX fell by 97.83 points, or 1.66 percent, over the week, compared to a gain of 22.95 points in the prior week. Among other indices, the DSE Shariah Index, which tracks Shariah-compliant companies, dropped by 21.03 points, or 1.79 percent. Meanwhile, the DSE-30 Index, comprising selected blue-chip firms, declined by 30.21 points, or 1.38 percent.
The bearish conditions also took a toll on trading turnover. Average daily turnover on the DSE fell to Tk 905.71 crore last week, down from Tk 997.56 crore in the previous week—a decrease of Tk 91.85 crore, or 9.21 percent.
In terms of turnover value, IPDC Finance topped the list with an average daily trade of Tk 29.51 crore, accounting for 3.26 percent of total turnover. It was closely followed by Dominage Steel Building, which averaged Tk 28.44 crore per day. Sharp Industries secured the third spot with a daily average of Tk 23.88 crore. Other companies rounding out the top ten turnover leaders included Malek Spinning, Beximco, Sayham Textile, Samorita Hospital, ML Dyeing, Envoy Textile, and Summit Alliance Port.
