Banks get battered
The heavyweight banking sector lost Tk 19,740 crore or 26.60 percent of its market capitalisation since the turn of the year in what can be viewed as a worrying development for the Dhaka Stock Exchange.
On January 1, the 30 listed banks' market capitalisation stood at Tk 74,210 crore; yesterday, it was Tk 54,470 crore.
This steep fall in the share prices of banks -- which account for about one-eighth of DSE's capitalisation, the highest -- has also dragged the benchmark index down 14.59 percent to 5,341 points in the last six months.
Bank is the most trustworthy sector to investors, who felt letdown by the ballooning bad loans and a cut in dividend announcements, according to market insiders.
In 2017, banks' default loans surged 19.51 percent to Tk 74,303 crore, as the Bangladesh Bank's efforts to rein in bad loans went in vain.
Of the 30 listed banks, 13 had announced lower dividends last year than a year earlier. And AB Bank even failed to offer any dividend and has subsequently become a junk stock.
Since January this year, market capitalisation of most sectors declined but the financial sector was hit particularly hard: non-bank financial institutions too shed 21.10 percent.
During the period, telecommunication lost 16.97 percent, pharmaceuticals 4.10 percent, engineering 6.55 percent, cement 15.12 percent, textile 1.89 percent and life insurance 6.30 percent.
Conversely, miscellaneous and fuel and power saw gains of 11.07 percent and 10.09 percent in market capitalisation respectively.
The banking sector lost the most among the major sectors yesterday too, declining 1.35 percent. It was followed by financial institutions at 0.84 percent, life insurance at 0.58 percent and fuel and power at 0.54 percent.
Conversely, mutual funds and engineering gained 0.68 percent and 0.64 percent respectively.
DSEX, the benchmark index of the premier bourse, declined 24.74 points or 0.46 percent, finishing the day at 5,341.27 points. "The capital bourse closed in the red amid profit booking tendencies," said the daily market analysis of EBL Securities.
Turnover, another important indicator of the market, increased 1 percent to Tk 901.26 crore, with 23.24 crore shares and mutual fund units changing hands on the DSE.
Of the traded issues, 141 advanced, 164 declined and 36 closed unchanged on the premier bourse.
BBS Cables dominated the turnover chart with its transaction of 50.80 lakh shares worth Tk 42.48 crore, followed by Bashundhara Paper Mills, Legacy Footwear, Singer Bangladesh and Ratanpur Steel Re-Rolling Mills.
Legacy Footwear was the day's best performer, posting a gain of 9.95 percent, followed by BBS Cables, Peninsula Chittagong, Pacific Denims, and Dragon Sweater and Spinning Mills.
GQ Ball Pen was the worst loser, shedding 7.49 percent, followed by Asia Pacific General Insurance, Libra Infusions, Agricultural Marketing Company (Pran) and Ratanpur Steel Re-Rolling Mills.
Chittagong stocks fell, with the bourse's benchmark index, CSCX, declining 34.15 points or 0.34 percent to finish the day at 9,958.68.
Losers beat gainers as 121 declined and 102 advanced, while 23 finished unchanged on the Chittagong Stock Exchange.
The port city bourse traded 1.27 crore shares and mutual fund units worth Tk 44.12 crore in turnover.
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