DSEX loses 419 points, market cap drops Tk25,572cr since 2 Nov

Infographics: TBS

In the last two weeks, stocks absorbed substantial sell-offs, which shed DSEX with 419 points – or over 8%, and erased Tk25,572 crore in market capitalisation, amid political uncertainties and fears over the implementation of newly introduced margin rules.

As per data from the Dhaka Stock Exchange (DSE), since 2 November, the market traded for ten sessions, during which stocks rose on only one day and continued to bleed for the remaining nine days.

Within this period, the DSEX lost 431 points in total, with a single-day gain of 12 points – resulting in a net decline of 419 points over the two weeks, according to the DSE.

A significant wave of sell-offs was observed in the week of 9-13 November, following the publication of the gazette on the new margin rules on 6 November, which came into immediate effect.

After the gazette was issued, the first trading session on 9 November saw the DSEX drop 68 points, while in the last trading session on Thursday, the index fell by 122 points to close at 4,702.

During the week, market capitalisation – the total market value of listed companies – dropped by Tk16,941 crore. 

As per data of the DSE, in the last week, average turnover declined by 26.85% to Tk354 crore. 

In the last week, 94% stocks saw price decline as of the traded stocks 363 scrip price declined, 17 advanced and 3 remained unchanged. 

Regarding the significant downtrend, a top executive of a brokerage firm, seeking anonymity, told The Business Standard, "In recent trading sessions, stocks were already on a red terrain due to political uncertainties, but last week the fall accelerated because of the newly introduced margin rules."

He added, "Some new clauses in the rules have created fear among intermediaries as well as investors, as they now have to adjust the lent funds. The market is already on a continuous downtrend, and in this situation, the newly introduced rules have hit the market badly."

Already, some investors have filed a writ petition seeking a halt to the new rules, and the High Court has issued a rule asking the government and the Bangladesh Securities and Exchange Commission (BSEC) to explain within seven days why the newly revised Margin Loan Rules, 2025 should not be declared illegal.

EBL Securities in its weekly commentary said, the Dhaka bourse suffered the brunt of intense bearish sentiment, as the market failed to earn any breather for the market participants as the lingering anxiety over the newly enacted margin rules and prevailing political developments continued to weigh on market sentiment. 

Broad based selling pressure dominated the whole week as rattled investors opted to reduce their investment exposure to the market's ailing momentum in order to limit further losses in their already hampered portfolios that dragged the broad market index around five months low by the week's close. 

It said investors were mostly active in the engineering sector, which contributed 14.2% in total turnover, followed by the pharmaceutical sector by 13.2% and Textile sector by 9.5%.