Stocks down for 2nd day

The Dhaka Stock Exchange (DSE) indices declined for two consecutive days, driven by profit-taking by investors and a drop in the prices of some blue-chip stocks.

Market insiders attribute the decline in the capital market to rising non-performing loans (NPLs) in the banking sector. According to the latest data from the Bangladesh Bank, total NPLs have surged to Tk2,84,977 crore, a sharp increase from Tk2,11,391 crore in June. This accounts for nearly 17% of the country's total outstanding loans of Tk16.83 lakh crore.

The rise in NPLs follows the end of Sheikh Hasina's 15-year-plus rule, during which practices like "window dressing" reportedly allowed banks to underreport defaulted loans. 

Yesterday, the benchmark DSEX index decreased by 28 points, closing at 5,300 points. The shariah index fell by 12 points to 1,171, and the blue-chip DS30 index decreased by 14 points to 1,963. 

Turnover on the DSE, however, increased by 9%, reaching Tk551 crore from Tk506 crore compared to the previous session. Among the 380 stocks traded, 133 gained, 205 declined, and 42 remained unchanged.

The indices initially opened on an upward trend and maintained the momentum for 40 minutes. However, they gradually began to decline, continuing to fall until the end of the trading session.

Key stocks contributing to the decline included Grameenphone, Beximco Pharmaceuticals, Robi Axiata, Square Pharmaceuticals, MJL Bangladesh, Islami Bank Bangladesh, BRAC Bank, Olympic Industries, British American Tobacco Bangladesh Company, and Prime Bank Ltd. 

In its daily market commentary, EBL Securities noted that the capital market of the country extended its downbeat vibe for two consecutive sessions as profit-booking sell pressure continued, which induced mild volatility across the trading floor while cautious investors are watchful of the market's momentum Investor sentiment remained subdued due to prevailing uncertainties surrounding the market outlook amid economic and political tensions that have been somewhat pervading over the trading floor.

However, opportunistic investors are closely monitoring market momentum to identify sector-specific stocks with potential for recovery following recent corrections, according to the brokerage house commentary.

In sector-wise performance yesterday, the pharma sector accounted for the highest turnover at 14.1%, followed by the bank sector at 13.9% and the general insurance sector at 10.3%. Most sectors posted negative returns, with the paper sector (down 2.4%), the ceramic sector (down 1.7%), and the services sector (down 1.6%) experiencing the highest corrections. However, some sectors recorded gains, including the life insurance sector (up 4.3%), the general insurance sector (up 3.3%) and the jute sector (up 2.6%).

Meanwhile, the port city bourse, the Chittagong Stock Exchange (CSE), also closed in negative territory. The CSCX index dropped by 28.7 points, while the All Share Price Index (CASPI) fell by 42.3 points.