Stocks
Market Woes Drive Investors Away as Dhaka Bourse Sees Significant Decline
By June 20 this year, approximately 102,000 beneficiary owners’ (BO) accounts were emptied, and market capitalization plummeted by Tk 1.37 lakh crore due to prolonged poor returns, frustrating investors and prompting them to exit the market.
Data from the Central Depository Bangladesh Limited (CDBL) reveals that in the six months leading up to June 20, the total number of BO accounts with zero share balance surged by 34% to 398,000, while BO accounts with share balances fell by 91,651 to 1.312 million.
During this period, the benchmark index DSEX of the Dhaka Stock Exchange (DSE) dropped over 1,000 points, closing at 5,244, while the blue-chip index DS30 fell by 218 points, settling at 1,875. The market capitalization at DSE also declined by over 17%, ending at Tk 6.43 lakh crore on June 20.
Rising interest rates, taxes on individual investors’ capital gains from listed securities, and a severe confidence crisis due to regulatory interventions are collectively impacting stock market performance, according to stockbrokers and market experts.
The capital market has been grappling with economic uncertainty, exacerbated by the Russia-Ukraine war. In response to the crisis, the Bangladesh Securities and Exchange Commission (BSEC) imposed a floor price in 2022 to prevent a freefall in share prices. Despite lifting the restriction after more than two years, the bearish trend persisted. Consequently, BSEC reintroduced protective measures, including reducing the circuit breaker limit from 10% to 3%.
Abu Ahmed, former economics professor at the University of Dhaka, explained that unprecedentedly high interest rates, especially on treasury bonds, have driven large investors to shift their funds from the stock market to bonds. “With treasury bond rates steady at around 12%, it’s a risk-free, preferred choice for many investors,” he said. This shift has resulted in a fund crisis in the market, he added.
Ahmed also highlighted a decline in the number of reputable companies entering the market and underperformance in key sectors like banks, insurance, non-bank financial institutions, and manufacturing companies. He pointed out that a lack of good governance and long-term policy support has eroded investor confidence. Additionally, the government is withdrawing previously granted investment benefits.
Md Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), stated in a June 11 press conference that factors such as the absence of high-quality initial public offerings (IPOs), governance issues among stakeholders, and the proposed capital gains tax are diminishing investor confidence. He urged the government to withdraw the capital gains tax, asserting that it exacerbates an already bleak market.
Finance Minister AH Mahmood Ali proposed a 15% tax on individual investors’ capital gains exceeding Tk 50 lakh from listed securities in the upcoming fiscal year budget, amid a market downturn. However, Abu Hena Md Rahmatul Muneem, chairman of the National Board of Revenue, argued in a post-budget press conference that taxation was not the root cause of the market’s issues, citing that long-standing tax incentives had not spurred market growth.
Despite these challenges, the benchmark index of the DSE has risen over the last four trading sessions, recovering 174 points to close at 5,244 last Thursday. Stockbrokers attribute this uptick to investor optimism about a potential rationalization of the capital gains tax proposal and a concessional salvage fund for the state-owned Investment Corporation of Bangladesh (ICB).
EBL Securities noted in their daily market commentary that rumors about the possible withdrawal of the proposed capital gains tax have instilled some confidence among cautious investors.
Major General Mohammad Quamruzzaman (retd) has stepped down from his role as an independent director of the board of the Dhaka Stock Exchange, citing personal reasons.
He also served as a member of the DSE’s Nomination and Remuneration Committee (NRC).
Quamruzzaman was appointed to the DSE board on 1 September 2024, following the fall of the Awami League-led government. After serving for nearly one year and nine months, he submitted his resignation on Saturday (24 May).
Speaking to Quamruzzaman confirmed his resignation, saying, “Yes, I have resigned as an independent director for personal reasons.”
Md Shafiqur Rahman, Deputy General Manager of Public Relations and Publications at the DSE, said Quamruzzaman submitted a resignation letter mentioning personal reasons behind his decision.
“The DSE board will now take a decision regarding the resignation,” Shafiqur Rahman said.
He also indicated that Quamruzzaman may be planning to join another company, which could have influenced his decision to resign.
Earlier, another independent director of the DSE board, Shahnaz Sultana, also resigned from her position. She was likewise a member of the NRC.
According to the DSE annual report, Shahnaz Sultana is the CEO and Chief Consultant of FINS Alliance Risk Advisory and Consultancy and has served as the Founder and Chairperson of the WE Global Women Foundation since 2020.
The Bangladesh Securities and Exchange Commission (BSEC) has today approved appointment of Ms. Nuzhat Anwar as the new Managing Director of Dhaka Stock Exchange PLC. (DSE).
Ms. Nuzhat Anwar brings over two decades of experience in financial markets, banking, and development finance. Prior to her appointment, she worked at the International Finance Corporation (IFC), the private sector arm of the World Bank Group, where she held multiple senior leadership roles across Africa and South Asia. Her positions included Resident Representative for Liberia and Sierra Leone, Senior Country Officer for Bangladesh covering Bangladesh, Bhutan, and Nepal, and acting Cluster Manager during the COVID-19 pandemic and the subsequent transition period.
Ms. Anwar also served as an IFC Country Officer in Botswana and Namibia, where she played a key role in establishing IFC’s presence in Gaborone and advancing a sustainable investment program, including IFC’s first investment in Botswana. She offers deep expertise in capital management, treasury and liquidity, transaction services, portfolio optimization, and market advocacy. Earlier in her career, she spent 16 years with Citibank Bangladesh and Standard Chartered Bank Bangladesh in various senior management roles.
Ms. Anwar holds a Master’s degree in Commerce (Finance) from the University of Dhaka.
On her appointment as the Managing Director of DSE, the Chairman of the Board of DSE Mr. Mominul Islam said, “We are pleased to receive the approval of BSEC for appointment of Ms. Anwar as the new Managing Director. Over the last one year the NRC and Board of have worked hard to recruit a competent leader as the MD of DSE. We are confident that Ms. Anwar, with her excellent leadership trait, vast experience in the financial sector in home and abroad and deep passion for transformation in the Capital Market of the Country, is the right candidate to lead DSE in the days ahead. Now, we will complete the internal processes to onboard Ms. Anwar at soonest.”
Dhaka Stock Market DSE, Bourse on the second working day of the week, 30th September, ended with a negative performance in Indices and a hike in Turnover from the previous working session. This information is known from DSE sources.
503 crore 90 lakh taka shares were traded on this day. 22 crore 58 lakh more tradings were done in DSE today compared to the previous workday, 29th September, Shares worth Tk 481 crores 31 lakh shares were traded last time, Sunday.
The benchmark DSEX lost 33.61 points or 5,624 The Shariah-based index DSES dropped 7.36 point or 1,263 and the blue-chip index DS30 decreased by 9.57 points or 2,053.
Of the issues traded, 72 advanced, 299 declined and 25 remained unchanged.
Shahjibazar Power Company Limited ranked top gainer on DSE, the share price increased by Tk 4.00 paisa or 9.76 percent. On this day, the share was last traded at Tk 45.00 paisa.
Dhaka Electric Supply Company Limited ranked top loser on the DSE, the share price dropped by Tk 1.80 paisa or 7.56 percent. On this day, the share was last traded at Tk 22.00 paisa.
DSE topped on trade is Pragati Life Insurance Limited 25 crore 35 lakh takas of company shares have been traded.
A total of 27 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 50 lakh 42 thousand 956 shares of the companies were traded. The financial value of which is 65 crore 60 lakh taka
