5 merger-bound Islamic banks see sharp rally after months of decline
DSE manages to close slightly higher, index inches up 9 points
Shares of the five Islamic banks slated for a government-enforced merger have rebounded strongly over the past three trading sessions, following months of steep decline.
According to Dhaka Stock Exchange (DSE) data, Social Islami Bank surged by 29% to Tk4 per share, Exim Bank climbed 27.58% to Tk3.70, First Security Islami Bank jumped 26.31% to Tk2.40, Global Islami Bank rose 21.42% to Tk1.70, and Union Bank advanced 20% to Tk1.80.
The surge comes as a reversal from steep losses recorded since August, when the Bangladesh Bank announced plans to consolidate the five lenders into a single Islamic bank.
Between August and 24 September, Exim Bank plunged 54.68%, First Security Islami Bank dropped 57%, Social Islami Bank tumbled 63.52%, Global Islami Bank slid 55%, and Union Bank fell 50%.
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The sell-off was triggered by concerns over the future of general shareholders, as the Bank Company Act does not provide compensation in cases of liquidation or merger.
However, optimism has resurfaced after indications that the Bangladesh Bank, following advice from the finance ministry, may explore ways to offer some form of relief to investors.
A central bank official confirmed that discussions are underway with the Bangladesh Securities and Exchange Commission (BSEC) on how to handle the delisting of these banks and ensure fair treatment of shareholders. Under the Bank Resolution Ordinance, the licences of the existing five institutions will be cancelled, and a new license will be issued to the merged entity.
Once combined, the new bank will hold assets worth an estimated Tk2.20 lakh crore, with Tk35,000 crore in paid-up capital sourced from government funds, the deposit insurance fund, and multilateral lenders.
Daily market
The DSE managed to close slightly higher today as last-minute buying helped offset early volatility, though overall sentiment remained cautious with investors awaiting the upcoming earnings season.
The DSEX, the key benchmark, inched up 9 points to end at 5,390 compared to 5,380 in the previous session.
EBL Securities, in its daily market review, said trading was choppy throughout the day, with corrections in several large-cap stocks weighing on the indices. However, buyers returned in the latter half, targeting selective sectors perceived to offer quick gains.
Market turnover rose by 6.2% to Tk599 crore from Tk564 crore in the prior session, indicating renewed activity despite lingering uncertainty.
Pharmaceuticals led the turnover chart with a 15.9% contribution, closely followed by textiles at 15.7% and banks at 12.1%.
Sector-wise, most closed higher, with jute gaining 3.5%, life insurance rising 2.5%, and paper advancing 2.2%. Travel, mutual funds, and pharmaceuticals, however, saw marginal corrections.
Out of 397 issues traded, 211 advanced, 104 declined, and 82 remained unchanged.
Chittagong's bourse also ended in positive territory, with the CSCX up by 2.9 points and CASPI higher by 11.5 points, reflecting similar late-session buying interest.
