The country’s stock market has plunged to a record low. A continuous fall in share prices has created a dire situation in the market. The index of the Dhaka Stock Exchange (DSE) has dropped to its lowest point in five years. Since August 5, while other sectors of the economy have seen changes, the stock market has been an exception—there has been no growth. Instead, indices and market capitalization are falling, along with liquidity.
In the past eight months, the index of the DSE has dropped by over 1,000 points. Market capitalization has declined by nearly BDT 600 billion (60,000 crore). Altogether, the stock market is now teetering on the edge of a deep abyss.
Experts attribute this situation to weak leadership of the Bangladesh Securities and Exchange Commission (BSEC).
In response, the Chief Adviser held a meeting with market stakeholders and issued five directives. However, there has been no improvement in the situation; share prices continue to decline broadly.
To address instability and restore investor confidence, Chief Adviser Professor Muhammad Yunus met with stakeholders on May 11. The meeting was attended by Finance Adviser Salehuddin Ahmed, the Chief Adviser’s Special Assistant (Ministry of Finance) Anisuzzaman Chowdhury, BSEC Chairman Khondoker Rashed Maqsood, Financial Institutions Division Secretary Nazma Mobarek, and others.
In the meeting, the Chief Adviser gave the following five directives to improve the market:
a)Take necessary steps to promptly bring to the stock market those foreign or multinational companies operating in the country in which the government holds ownership.
b)Encourage large and well-performing private companies, established over the past 20–30 years, to enter the market by offering incentives.
c)Bring in a team of foreign experts to carry out capital market reforms within three months.
d)Take swift action against officials and employees of capital market-related institutions who are accused of specific irregularities or corruption.
e)Implement measures to encourage large companies to raise capital by issuing bonds or shares in the stock market instead of relying on bank loans.
Even after the meeting, no positive impact has been seen in the market.
Trading continues amid a severe drop in prices. Share prices of almost all types of listed companies have been falling for several months. As a result, on May 8, the DSEX index dropped to 4,781 points.
Amidst a severe slump, trading continues in the stock market. Over the past few months, there has been a widespread decline in the share prices of all types of listed companies. As a result, the main index of the DSE, DSEX, stood at 4,781 points on May 8.
In just the last three days of the past week, the DSEX index dropped by 140 points, reaching its lowest level since August 24, 2020, when the index stood at 4,762 points.
After the formation of a new commission on August 18 last year, there were expectations that the stock market would improve. However, that did not happen. Instead, since the new commission took office until May 15, the DSEX index has dropped by 1,123 points.
On the day the current commission took office, the DSEX index stood at 5,904 points at the start of trading. However, by May 8, the index had dropped by 1,123 points, reaching 4,781 points.
Over the past eight months, market capitalization—i.e., the total value of investors’ shares—has dropped alarmingly. On August 18 last year, total market capitalization was BDT 7.08 trillion (7,08,964 crore). As of May 8, it had fallen to BDT 6.49 trillion (6,49,484 crore). This means the value of securities held by investors has decreased by approximately BDT 605.2 billion (60,652 crore). In reality, investors have lost even more.
Frustrated by the authorities’ failure to improve the situation, small investors have taken to the streets in recent days, organizing protest rallies. They are demanding the removal of BSEC Chairman Khondoker Rashed Maqsood. Investors are blaming the ongoing market collapse on the incompetence and lack of knowledge of the BSEC leadership under Chairman Maqsood.
Long-time stock market investor Ataullah Nayeem told Bangladesh Pratidin that investors are completely frustrated with the actions of the authorities.
He said, “The stock market is facing a continuous decline, and it’s due to incompetence. They keep wasting time month after month talking about reforms, while the market keeps sinking. By the time any real change happens, investors will have lost all their capital. Reform and market stabilization need to happen simultaneously. But the current commission only talks about reforms. No one can say for sure whether any actual reforms are being implemented or if those reforms will have any real impact on improving the stock market. They need to move beyond theoretical thinking and take practical steps. Otherwise, confidence in the market won’t return, nor will investor frustration be alleviated.”
Bd-pratidin English/ Afia
