Bangladesh stock market weathers trump's tariff storm, but uncertainty lingers

While global markets are rattling under pressure from US President Donald Trump's aggressive tariff war, Bangladesh's stock market opened the week with surprising resilience after a nine-day Eid holiday.

Despite an early dip driven by investor caution, the Dhaka Stock Exchange (DSE) recovered momentum as the session progressed. Selective buying helped reverse the downward pull, signalling renewed investor confidence in specific sectors.

However, the benchmark DSEX index ended the day down by 13.96 points, closing at 5,205. On the other hand, the blue-chip DS30 index bucked the trend, gaining 14.65 points to finish at 1,929 – a sign of strength among fundamentally sound stocks.

Meanwhile, the Chittagong Stock Exchange (CSE) also ended the day in positive territory. The CSE's general index, CSCX, gained 11 points to reach 8,854, while the all-share price index, CASPI, climbed 19 points to close at 14,560.

Ashequr Rahman, managing director of Midway Securities, told The Business Standard that while global tensions initially rattled local investors, the market stabilised by the session's close.

"In the first hour, rising worldwide tensions triggered panic among investors, but by the end of trading, things returned to normal," he said. "Our market has been at a bottom for years, so the tariff war didn't hit us as hard as it did other countries' stock markets."

Among the traded stocks on the DSE, 101 advanced, while 262 declined and 30 remained unchanged. The daily turnover also jumped by 32% to reach Tk415.50 crore as investors participation increased.

In its daily market review, EBL Securities said Dhaka stocks fell sharply at the start of the session as nervous investors reacted to US-imposed tariffs. However, the market saw a modest recovery later, driven by bargain hunters picking up sector-specific stocks at attractive prices.

Trump on Wednesday announced reciprocal tariffs to match duties put on US goods by other countries. The US president displayed a poster that listed reciprocal tariffs, including 37% on Bangladesh, a significant rise from the current 15%.

The announcement came while the Dhaka Stock Exchange was closed for the Eid vacation.

Trump's tariff move sent global stock markets into a tailspin, with the S&P 500 losing $5 trillion in value by Friday, marking a record two-day decline. Fears of a global recession sent oil and commodity prices tumbling, while investors flocked to safer government bonds, as reported by Reuters.

In response, Chief Adviser Muhammad Yunus convened an emergency meeting on Saturday with senior officials and experts to formulate a strategy. A briefing note indicated that Yunus would engage with US officials in Washington to negotiate a resolution and protect Bangladesh's market access.

Ashequr Rahman said, such immediate initiatives from the government help investors not to panic. "We hope that the current interim government is capable of dealing with the US."

However, he cautioned: "We cannot assume tariffs won't impact us at all. If these measures trigger a global recession, we will certainly feel the effects."

A senior brokerage official added that while Trump seeks more imports from the US in exchange for lower tariffs, Bangladesh's limited exports to the US means the stock market may not face significant disruption.

The US is Bangladesh's largest export market, accounting for 18% of the country's ready-made garment exports. In the 2023-24 fiscal year, Bangladesh exported $6.63 billion in garments to the US, along with $280 million in leather and leather products. 

Other key exports include home textiles, frozen fish, jute and jute products, and plastic goods. In total, Bangladesh exported approximately $7.6 billion worth of products to the US last year.

Textile firms see sharpest fall

Among the 58 textile companies listed on the DSE, 54 saw their share prices decline on Sunday. Only Dulamia Cotton bucked the trend with a price increase, while three other firms remained unchanged.

Textile stocks led market declines with a sector-wide 3.89% drop, marking the day's steepest losses and wiping out crores in market capitalisation.

Eight textile firms dominated the day's top ten losers, led by Hamid Fabrics, Simtex Industries, New Line Clothings, and Metro Spinning. In contrast, mutual funds, ceramics, and pharmaceuticals delivered the highest returns for investors.

The mutual fund sector showed particular strength, claiming seven spots on the top ten gainers list. Beximco Pharma led the gainers, followed by NCC Bank First Mutual Fund, Shinepukur Ceramics, and ICB AMCL Second Mutual Fund.