DSE suspends trading in loss-making Zeal Bangla Sugar as DSEX ends in the red

The Dhaka Stock Exchange (DSE) today (7 July) temporarily suspended trading in the shares of Zeal Bangla Sugar Mills Ltd after the loss-making company's stock posted an unusually sharp price increase, saying the move was aimed at protecting investors, ensuring fair price discovery and maintaining market stability.

The stock rose 8.53% to Tk180.70 before trading was halted at around 10:45am. The exchange said the rally appeared inconsistent with the company's financial and operational performance, prompting regulatory scrutiny.

Under its listing regulations, the DSE may suspend trading in a listed company's shares if it detects abnormal price movements, suspicious trading patterns or other circumstances that could undermine market integrity. Such action allows regulators to determine whether the movement was driven by undisclosed price-sensitive information (PSI), market manipulation or other regulatory violations.

The exchange said trading may also be halted in cases involving delayed financial disclosures, misleading or incomplete information, corporate governance irregularities, concealment of material information, loan defaults or court rulings that could materially affect a company's financial position.

The decision drew mixed reactions from market participants. While many brokerage houses supported a regulatory investigation into the unusual price movement, some argued that suspending trading in the entire stock could unfairly affect ordinary investors.

They suggested the regulators identify and investigate the specific Beneficiary Owner (BO) accounts suspected of manipulation instead of freezing trading in the shares altogether.

The DSE, however, maintained that the suspension was a routine regulatory measure intended to protect investors while allowing time to verify whether the sharp rally had any legitimate basis.

The suspension also dampened overall market sentiment. Although the benchmark index opened higher, selling pressure intensified as the session progressed, dragging the market into negative territory by the close.

The benchmark DSEX fell 17.9 points to settle at 5,781. The DS30 Index declined 11 points to 2,182, while the DSES Shariah Index edged up 2 points to 1,185.

Turnover on the DSE eased 2% from the previous session to Tk1,388 crore.

Market breadth remained negative, with 180 issues declining, 160 advancing and 50 remaining unchanged out of the 390 securities traded.

The Chittagong Stock Exchange (CSE), however, bucked the trend. The CSCX gained 25.8 points and the CASPI advanced 42.9 points as investors accumulated selective large-cap and fundamentally strong stocks.

In its daily market review, EBL Securities said the DSEX slipped back into correction territory after crossing the 5,800-point mark in the previous session, as sustained selling pressure outweighed early buying interest.

According to the brokerage, investors locked in gains from recently appreciated stocks, causing the market to lose momentum after a positive start.

The textile sector accounted for the largest share of turnover at 20.9%, followed by general insurance with 11.5% and pharmaceuticals and chemicals with 11.2%.

Most sectors closed lower, with services recording the biggest decline of 1.4%, followed by cement, down 1.2%, and fuel and power, which fell 1.1%.

Among the gainers, the mutual fund sector led with a 4.6% rise, while textile and general insurance advanced 0.9% and 0.5%, respectively.