DSEX extends losing streak for second straight day
Analysts identified several factors behind the market’s sluggish performance. Political uncertainty remains the primary concern, affecting the overall economy
The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), extended its losing streak for the second consecutive session on Monday (3 November), as turnover fell and investors remained wary amid election-related uncertainties and a gloomy economic outlook.
On Monday, the DSEX fell by 55 points to close at 5,061, while the blue-chip DS30 index dropped 22 points to 1,961. The Shariah index also declined by 12 points, settling at 1,163.
Market turnover decreased by 4.77% to Tk519 crore, down from Tk545 crore in the previous session. Out of 398 issues traded, 45 advanced, 300 declined, and 53 remained unchanged.
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Market insiders noted major investors are following a wait-and-see strategy ahead of the upcoming national election, leading to lower market participation and weaker turnover, which continues to keep the stock indices under pressure.
Analysts identified several factors behind the market's sluggish performance. Political uncertainty remains the primary concern, affecting the overall economy. Besides, there is little to no significant new investment in the country, imports of capital machinery have fallen sharply, and private sector credit growth has slowed considerably.
Many fundamentally strong companies are experiencing declining earnings, further dampening investor confidence. Analysts added that the market typically remains slow during this time of year, compounding the downward pressure.
However, market observers believe any positive political developments could quickly change the market outlook and trigger a rebound. A continued decline in government bill and bond rates could also make equities more attractive and help the market regain momentum. Once the election schedule is officially announced, large investors now on the sidelines are expected to re-enter the market.
The capital market regulator has also implemented several reform initiatives, some of which have already had a positive impact. With yields on government securities declining, equities are offering comparatively higher returns—averaging above 10%—encouraging investors to shift funds from bonds to stocks. An analyst, requesting anonymity, added the market could strengthen further if treasury bill and bond rates continue to fall.
In its daily market commentary, EBL Securities said the benchmark index faced a sharp downturn as investor pessimism intensified amid lingering political uncertainties. Broad-based sell-offs from the early hours of trading dragged the index lower for the second straight session.
On the sectoral front, Pharma led with 12.6% of total turnover, followed by Engineering at 11.6% and Textile at 10.5%.
All sectors except Jute (3.4%) posted negative returns, with Life Insurance (3.6%), Paper (3.0%), and Ceramic (3.0%) suffering the most significant losses.
The Chittagong Stock Exchange (CSE) also experienced a bearish session, with the Selective Categories Index (CSCX) and All Share Price Index (CASPI) falling by 49.6 points and 88.0 points, respectively.
