GP slump drags down Dhaka stocks

After the removal of the floor price restriction on Grameenphone (GP) stocks, its shares witnessed a significant decline of nearly 9%, propelling downward pressure on the benchmark index of the Dhaka Stock Exchange (DSE) today.

At the end of the trading session, the major index DSEX of the Dhaka bourse experienced a decline of 39 points or 0.62%, settling at 6,215. Simultaneously, the blue-chip index DS30 lost 13 points, closing at 2,113.

According to the daily market review by EBL Securities, the significant decline of 8.72% in the shares of GP had a substantial impact on the index, dragging it down by over 15 points.

In addition to GP, other large stocks such as Square Pharmaceuticals, BRAC Bank, IFIC Bank, Beximco Pharma, and Orion Pharma were also contributors to the decline in the index today.

EBL Securities, in its market commentary, pointed out that the removal of the floor price for GP, along with the addition of six new stocks to the Z category, intensified the market's downturn.

The EBL Securities said throughout the trading session, the market stayed on the red trajectory as investors continued offloading shares to avoid losses amidst shaky confidence across the trading floor.

Currently, GP holds the title of the largest company in terms of capitalisation, representing 8.3% of the Dhaka Stock Exchange's total market size. GP's current total market capitalisation is Tk35,323 crore.

Market insiders pointed out that being the largest stock on the Dhaka bourse, any fluctuations in the price of GP significantly impacted the overall index movement.

GP shares had remained stuck at the floor price at Tk286.60 each on the Dhaka bourse from September 2022 to 28 February this year.

On 5 February, Grameenphone declared a 125% cash dividend for its shareholders for 2023, which is the lowest since 2010.

The dividend payout ratio for 2023 represents 51.03% of its total profit. In 2022, it had paid 98.72% of its total profit.

Insiders in the market say that GP's announcement of a weak payout has shaken investor confidence, contributing to the downward trend in its shares.

Meanwhile, the DSE turnover rose by 7% to Tk981 crore as against Tk916 crore in the previous session.

The port city bourse, Chittagong Stock Exchange, also settled on red terrain. The selected indices CSCX fell by 52 points to settle at 10,691 and the all-share Price Index CASPI plunged by 87 points to close at 17,841.

The turnover of the Chittagong bourse fell by 8% to stand at Tk18 crore.