Dhaka stocks worst performer globally in October: Report

The Dhaka Stock Exchange (DSE) has emerged as the world's worst-performing market in October, with its key index – the DSEX – tumbling 5.42% in stark contrast to the positive momentum seen across most major global and regional markets, according to a latest monthly report by EBL Securities.

While benchmark indices across the US, UK, China, India, and Sri Lanka registered notable gains during the month, Bangladesh's equity market continued to slide under the weight of deepening political uncertainty, regulatory confusion, and deteriorating investor sentiment.

The DSEX lost 293.6 points in October, closing at 5,122 – its lowest in three months – marking the steepest monthly fall among all tracked indices globally, says the report titled "EconoInsights – Monthly Economic and Capital Market Overview."

In comparison, the US S&P 500 rose 2.67%, India's Sensex advanced 4.22%, Sri Lanka's CSE All-Share gained 4.71%, and South Korea's KOSPI soared a staggering 18.26%. Even Pakistan's Karachi 100, which was among the weaker performers, declined 5.09% – less than Bangladesh's DSEX.

Rayhan Ahmed, a senior research associate at EBL Securities, told TBS that the DSEX extended its bearish streak for a second consecutive month as investors remained jittery amid persistent macroeconomic and political challenges. 

"Broad-based sell pressure dominated trading from the start of the month. The index hit a three-month low as confidence eroded further, driven by ongoing political unrest, instability in the financial sector, and panic-driven rumours," he said.

Rayhan said that ambiguity surrounding certain regulatory moves – particularly regarding margin loans and capital market reforms – also weighed heavily on sentiment.

"Most investors adopted a wait-and-see approach, avoiding new exposure ahead of the earnings season and national elections," he added.

According to EBL Securities, market participation shrank sharply in October, with average daily turnover plummeting by 40.9% month-on-month. This steep decline reflects a growing lack of confidence among retail and institutional investors alike.

The brokerage warned that the DSEX is likely to remain sensitive in the coming months as the political climate heats up and long-awaited reforms in the financial and capital markets remain in flux.

The situation worsened further in early November, with the DSEX falling another 297 points as of 12 November to close at 4,825 – its lowest level in nearly five months. Daily turnover dipped below Tk300 crore for the first time in over four months, while total market capitalisation eroded by Tk43,000 crore since the beginning of October.

Market analysts say that anxiety over new margin loan guidelines and the broader political uncertainty ahead of the upcoming national election have continued to fuel selloffs.

"The market has entered a confidence crisis," said a senior market analyst. "Liquidity is tight, participation is weak, and there's no immediate trigger for recovery."

A sectoral breakdown from LankaBangla Securities shows that all major sectors, except general insurance, ended October in negative territory. 

The IT sector suffered the steepest decline, plunging 10.9%, followed by paper and printing at 13.9%, jute at 11.8%, and non-bank financial institutions at 9.5%. Banks, cement, engineering, power, and textile stocks also saw declines ranging between 4% and 6%. General insurance was the only bright spot, gaining 3.3% during the month.