Liquidation fears for weak NBFIs trigger sell-off as DSEX sheds 38 points
The blue-chip DS30 index also faced significant pressure, falling 14 points to settle at 2,177.
The Dhaka Stock Exchange (DSE) extended its losing streak for a second consecutive session today (10 August), as panic over the potential liquidation of several non-bank financial institutions (NBFIs) triggered a broad-based sell-off.
The benchmark DSEX index fell 38 points, or 0.65%, to settle at 5,822. Bearish sentiment persisted throughout the session, with nearly 73% of traded issues closing lower, as investors remained cautious amid a lack of strong positive catalysts.
The blue-chip DS30 index also faced significant pressure, falling 14 points to settle at 2,177. The day's trading reflected a sharp decline in market participation, as total turnover on the DSE dropped by 16% to Tk964 crore, compared to the final session of the previous week.
This contraction in trading volume suggests that while sellers were active, buyers remained largely on the sidelines, waiting for clearer market directions, according to the market insiders.
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The overall market valuation suffered a heavy blow, with the market capitalisation of the Dhaka bourse declining by approximately Tk4,800 crore in a single day.
According to EBL Securities' daily market review, the benchmark index remained in negative territory from the opening, weighed down by persistent selling pressure as the previous session's profit-taking continued. Although some interest emerged in small-cap and momentum-driven stocks, it was insufficient to offset heavy selling in large-cap and fundamentally weak sectors.
A managing director of a brokerage firm said the primary driver of the day's downturn was the news that Bangladesh Bank has reportedly initiated a process to liquidate chronically non-performing NBFIs.
Market sources said the central bank is initially targeting four institutions—International Leasing, Fareast Finance, FAS Finance and Aviva Finance—with plans to address other weak entities later. The news sent shockwaves through the NBFI sector, which led the losers' list.
Peoples Leasing shed 8.33%, while GSP Finance, Fareast Finance, and International Leasing all recorded losses of 8% or more.
Sectoral data showed that the textile sector dominated the turnover chart, accounting for 21.7% of the total volume, followed by the general insurance sector at 16.1% and the engineering sector at 9.7%.
Performance across most segments was negative, with mutual funds facing the steepest correction of 3.4%, followed by financial institutions and IT.
Conversely, the paper and printing, miscellaneous, and jute sectors managed to post marginal positive returns.
In the individual scrip segment, Nitol Insurance emerged as the top gainer with a 9.83% price hike, followed by Sharp Industries, Tung Hai Knitting, and Hamid Fabrics.
The bearish sentiment was also reflected at the Chittagong Stock Exchange (CSE), where the Selective Categories' Index (CSCX) fell 59 points to close at 9,521, while the broad CASPI index plunged 106 points to 15,618. Despite the decline, turnover at the port city bourse rose marginally by 5% to Tk31 crore.
