Low-paid-up firm’s shares surge amid 22% drop in DSE turnover

The premier index of the Dhaka Stock Exchange (DSEX) extended its losing streak for the second consecutive session today (27 August), as cautious investors booked profits and shifted to selective stocks — mainly low-paid-up, undervalued, and promising ones.

Over the past three sessions, the DSEX has lost a total of 12 points.

Today (27 August), shares of several poorly performing, non-compliant, or non-operational companies surged sharply without any disclosed reason. Regent Textile Mills and Padma Islami Life Insurance gained 10% each, Safko Spinning advanced 9.86%, New Line Clothings rose 8.93%, and Nurani Dyeing increased 8.70%.

The DSEX slipped 6 points to close at 5,543, while the blue-chip DS30 index fell 8 points to 2,116, and the Shariah index dropped 2 points to 1,189.

Turnover plunged 22.12% to Tk972 crore, compared to Tk1,248 crore in the previous session.

Out of 394 issues traded, 158 advanced, 174 declined, and 62 remained unchanged.

Market insiders expect the current trend to persist through the week, with a potential rebound next week. They noted that the Bangladesh Securities and Exchange Commission (BSEC) is in the process of tightening margin loan rules for investors. In the meantime, manipulators are targeting low-paid-up and non-operational companies, as these are easier to move and manipulate.

A key factor supporting equities is the falling yield on government securities, which analysts expect to decline further. With stock market returns currently above 10%, lower bond yields are making equities more attractive.

Investor confidence has also been boosted by positive macroeconomic indicators. Bangladesh's foreign exchange reserves have stabilised and started to rise, the government's plan to merge weaker banks has reassured the market, and political uncertainty ahead of the upcoming national election has eased.

Additionally, many listed companies—especially those with a June-ending fiscal year—remain undervalued, attracting renewed buying interest.

Analysts say easing economic concerns, supportive policy measures, and attractive valuations are helping sustain market resilience.

Most large-cap sectors ended in the red. Non-Bank Financial Institutions (NBFIs) posted the steepest drop of 1.34%, followed by Banks (-0.75%), Food & Allied (-0.40%), and Pharmaceuticals (-0.23%). Telecommunications remained flat, while Engineering gained 0.09% and Fuel & Power rose 0.84%.

Block trades accounted for 1.3% of the day's total market turnover. The City Bank Ltd was the most traded stock, slipping 0.8% with a turnover of Tk22.40 crore.