Written by The Banking Post
The domestic stock market closed lower this week, breaking an eight-week winning streak, as cautious investors engaged in heavy profit-taking in recent gainers, particularly within the banking and blue-chip sectors.
Market analysts attributed the decline to a natural correction following substantial gains in recent weeks. Bank stocks, which had rallied more than 20 per cent in the past month, saw steep pullbacks. SBAC Bank, for instance, surged 30 per cent over the month before shedding 9 per cent this week, ranking as the third-largest weekly loser.
The banking sector faced additional pressure amid reports of significant half-yearly losses for several lenders, as default loans climbed in the wake of the political transition. Analysts noted that previously undisclosed non-performing loans under the former government are now surfacing, eroding investor confidence.
Sector-wise, banks suffered the steepest weekly loss, down 3.54 per cent, with SBAC Bank, Trust Bank, City Bank, and Dhaka Bank all featuring among the top losers.
Despite the downturn, the broader market had enjoyed strong gains in recent months. Over the past eight weeks, the DSEX, the Dhaka Stock Exchange’s benchmark index, advanced about 805 points, supported by improved macroeconomic indicators, while market capitalisation rose by Tk 617 billion.
“The momentum traders who had taken positions in banking stocks booked their profits, which caused the index to drop,” said Akramul Alam, head of research at Royal Capital. “This is not necessarily negative, as profit realisation can encourage reinvestment.”
Positive factors such as falling government securities’ yields, macroeconomic improvements, and optimism from US tariff negotiations had helped drive the earlier rally. The market opened this week on a bullish note, surpassing the 5,500 mark for the first time in 10 months, before losing momentum midweek as selling pressure mounted.
The DSEX ended the week down more than 35 points, or 0.65 per cent, at 5,408. The DS30, comprising blue-chip companies, fell nearly 17 points to 2,097, while the DSES, representing Shariah-compliant firms, edged down 0.18 point to 1,170.
EBL Securities, in its weekly review, noted that despite regulatory initiatives to list 15 state-owned and multinational firms and clarity on the possible election timeline, investor sentiment remained subdued.
Bank stocks were the main drag, with BRAC Bank, City Bank, Eastern Bank, Prime Bank, and Al-Arafah Islami Bank jointly shaving around 30 points off the DSEX.
Turnover remained robust, totalling Tk 36.45 billion, compared with Tk 41.94 billion a week earlier. With only four trading days due to a public holiday, average daily turnover rose nearly 9 per cent to Tk 9.11 billion from Tk 8.39 billion the previous week.
The banking sector dominated the turnover chart, accounting for 26.6 per cent of weekly transactions, followed by pharmaceuticals (12.5 per cent) and textiles (9.8 per cent).
Market breadth was negative, with 227 losers, 138 gainers, and 30 unchanged out of 395 traded issues on the DSE. Apart from banking, non-bank financial institutions, food, general insurance, and cement sectors also closed lower, while textiles, telecom, and pharmaceuticals managed gains.
Bangladesh Shipping Corporation topped the turnover list, with shares worth Tk 1.4 billion changing hands, followed by City Bank, Jamuna Bank, Uttara Bank, and BRAC Bank.
The Chittagong Stock Exchange mirrored the DSE’s performance, with the CASPI losing 9 points to 15,193 and the CSCX down 8 points to 9,317.
