DSEX sees sharp fall as investors sell off blue-chip stocks

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) suffered a sharp fall on Tuesday (13 May), reversing early gains as investors sold off blue-chip stocks amid concerns over the upcoming budget and lack of market-supportive signals.

The DSEX closed 47 points lower at 4,875, while the DSE Shariah Index (DSES) dropped 12 points to 1,064. The DS30 Index, which tracks blue-chip stocks, gained 17 points to reach 1,799, despite most large-cap shares facing downward pressure.

Key blue-chip stocks – Square Pharmaceuticals, British American Tobacco Bangladesh, Beximco Pharmaceuticals, Grameenphone, Islami Bank, and Unilever Consumer Care – led the decline, dragging the broader market lower. 

The daily turnover fell to Tk344 crore, down from Tk364 crore in the previous session, indicating weakening investor activity.

Market insiders said the exit of long-term, transparent investors has left the field to short-term traders and, in some cases, suspected manipulators. 

Recent regulatory actions against market manipulation have contributed to lower participation, leaving both the primary and secondary markets in a liquidity crunch.

"In the absence of confidence and liquidity, even fundamentally strong stocks are being sold off," said a market analyst. "Investors are increasingly seeking safer avenues amid mounting uncertainty."

Hopes that last year's political changes in July–August would trigger a market recovery have gradually faded. Despite ten months passing since the shift in power, the market has shown no sustained signs of improvement. As the downturn lingers, investor frustration is intensifying.

Discontent with market leadership has also been growing, analysts said. General investors have staged protests in recent days, calling for the resignation of the Bangladesh Securities and Exchange Commission (BSEC) chairman. 

Critics allege that he lacks sufficient knowledge of market dynamics and has failed to restore investor trust. Several former BSEC chairmen and leading market participants have echoed these concerns.

Analysts also warn of upcoming economic headwinds. A sharp rise in gas prices is expected to drive up production costs, which may affect corporate earnings across multiple sectors. This, combined with low institutional involvement and the continued exit of retail investors, is further weakening market sentiment.

In its weekly commentary, EBL Securities noted, "The capital bourse reverted to bearish mode as dominant selling pressure persisted, deepening investor anxiety due to a lack of any short-term respite from the prolonged downturn."

Despite a brief morning rally driven by bargain hunting, the market lost momentum in the second half as selling pressure returned. Most listed securities ended in the red, reflecting broader pessimism among investors.

On the sectoral front, Banking led turnover with 28.5%, followed by Mutual Funds at 13.0% and the Food sector at 8.7%. However, all sectors posted negative returns. The worst-performing sectors were Ceramics (down 3.3%), Jute (3.0%), and Mutual Funds (2.8%).

The bearish trend extended to the Chittagong Stock Exchange (CSE), where the Selective Categories Index (CSCX) declined by 19.8 points and the All Share Price Index (CASPI) dropped by 36.9 points.