Stock Market Declines Amid Regulatory Turmoil

Over the last five trading days, despite a slight recovery in the final two sessions, the overall market trend remained negative, with the Dhaka Stock Exchange’s (DSE) benchmark index, DSEX, slipping by 43 points. From a starting point of 5,247 points on March 2, it fell to 5,203 points by the market's close on March 6.

In parallel, the blue-chip DS30 index shed 15 points, while the Shariah-based DSES index saw a decline of 6 points over the same period. The SME index also took a significant hit, dropping below 1,000 points after a sustained downturn. The DMMA index saw a notable 4.65% decrease, falling from 1,017 points to 970 points.

Most listed companies saw a downturn in share prices. Out of 289 companies reporting declines, only 86 posted increases, with 20 remaining unchanged. Trading volume on the DSE plummeted by 28.79%, and the daily average turnover dropped from over Tk 500 crore to Tk 300 crore, contributing to a 1.90% decline in market capitalization.

While only a few sectors—energy, paper, and leather—showed price increases, the broader market remained in the red. The banking sector, for instance, witnessed a staggering 27.61% drop in share prices and a 31.91% decrease in trading volume. Of the 36 listed banks, 23 experienced declines, while just 4 saw their prices rise. The financial institutions sector performed even worse, with share prices falling by 29.49% and trading volume dropping by 40.95%. Among the 23 listed institutions, 19 recorded price declines, 3 saw increases, and 1 remained unchanged.

The general and life insurance sectors were hit hard by massive sell-offs. The general insurance sector experienced a 43.23% fall in share prices, while life insurance shares plummeted by 59.16%.

Top Performers and Market Trends
Amidst the downturn, some companies showed resilience. Orion Infusion Limited topped the list with the highest turnover, averaging Tk 21.46 crore in daily transactions, followed by Prime Bank and Beach Hatchery Limited. In the block market, transactions totaled Tk 114.70 crore, with Prime Bank leading the way at Tk 40 crore, trailed by Beach Hatchery at Tk 18.80 crore.

Progressive Life Insurance emerged as a standout performer, seeing its share price rise by 17.74%, while S Alam Cold Rolled Steels Limited suffered the largest decline, losing 14.83%.

Chittagong Stock Market Struggles
The Chittagong Stock Exchange mirrored Dhaka’s struggles, with its index slipping from 14,633 points to 14,502 points by the end of the week. Among the 329 companies traded, 215 saw declines, while 29 remained unchanged, and only 85 posted gains. Tasrifa Industries Limited recorded the sharpest fall, with a 17.5% drop in share value, while Indo-Bangla Pharmaceuticals Limited was among the top gainers, with a 16.98% increase.

The most traded stock in Chittagong was Robi, a prominent telecom company, indicating a slight shift in investor interest.

Regulatory Crisis Deepens
In addition to market downturns, the Bangladesh Securities and Exchange Commission (BSEC) has been engulfed in unprecedented internal conflict. Chairman Rashed Maksud, who took office in August 2024, has come under intense criticism due to the continuous market declines, with investors and brokerage officials accusing him of ignoring market sentiment with his reform measures.

Tensions escalated dramatically when BSEC employees staged a protest demanding Maksud’s resignation. On March 5, employees confined the chairman and other commissioners in a protest, prompting intervention from security forces. Despite mounting pressure, Maksud refused to step down. Protesters have warned of an indefinite strike starting March 9 if their demands are not met, further threatening the commission’s operational stability.

A director of the DSE, speaking on condition of anonymity, expressed frustration with the BSEC’s recent handling of market affairs. "For the past 15 years, BSEC has been operating arbitrarily. These unilateral actions have frustrated stakeholders, and now, internal discontent within the commission itself is sending a negative signal to the market," the director said.

Market Outlook
Market analysts are urging swift resolution of the regulatory crisis and the gradual implementation of stock market reform recommendations to restore investor confidence. Without such measures, they warn that Bangladesh’s stock market could face prolonged instability, deepening the challenges for both investors and the broader economy.