Written by The Banking Post
Dhaka stocks slumped to a four-month low on Wednesday as panic gripped investors following the central bank’s decision to dissolve the boards of five crisis-hit Islamic banks and merge them into a single entity.
The DSEX, the key index of the Dhaka Stock Exchange (DSE), dropped 32 points or 0.64% to close at 4,987, breaching the psychological 5,000-mark for the first time since early July. The index has now lost 130 points over four consecutive sessions.
Market sentiment soured sharply after the Bangladesh Bank declared First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and Exim Bank non-viable and merged them into Sammilito Islami Bank.
At a briefing, Bangladesh Bank Governor Ahsan H. Mansur said the five banks had negative net asset values ranging from Tk 350 to Tk 420 per share, leaving both sponsor and general shareholders with zero value.
The move triggered widespread sell-offs across the market, with investors fearing deeper losses. The combined market capitalisation of the five banks has already fallen to Tk 13.75 billion, down from Tk 17.3 billion five months earlier.
Analysts said the development worsened an already fragile confidence crisis among investors, who were also grappling with political uncertainty ahead of the national election.
Trading began on a positive note but turned bearish in the final hour as investors adopted a defensive stance. Turnover remained thin at Tk 4.85 billion, slightly higher than the previous session’s Tk 4.53 billion.
Sector-wise, non-bank financial institutions suffered the steepest losses, down 1.47%, followed by declines in power, engineering, banking, food, and pharmaceuticals.
Out of 400 traded issues, 267 declined, 70 gained, and 63 remained unchanged. Orion Infusion led the turnover chart, followed by Summit Alliance Port, Anwar Galvanizing, Asiatic Laboratories, and CVO Petrochemicals Refinery.
The Chittagong Stock Exchange mirrored the downtrend, with the CASPI dropping 106 points to 14,028 and the CSCX falling 69 points to 8,652.
Market observers warned that investor confidence may take time to recover unless there is regulatory clarity on how the merged Islamic banks’ shares will be treated in the coming weeks.
