Staff Correspondent

The capital market has suffered the largest fall during the interim government’s tenure following the exit of prime minister Sheikh Hasina’s government amid a massive movement spearheaded by students.

On Sunday, the first trading day of the week, the main index of the country’s premier bourse, Dhaka Stock Exchange, or DSE, sank 125 points from the previous day. Following the fall of the government on Aug 5, the index had risen by 695 points over three trading days.

This significant drop, on a day when investors who had been hopeful after a prolonged market decline, has come as a shock to them.

Before the fall of the government, the DSE index stood at 5,229 points on the last trading day. Trading resumed on Aug 6 after a general holiday. Over the next five days, the index rose until Aug 12, reaching a peak of 5,932 points.

Subsequently, the DSE underwent a correction, and on Sunday, the index saw a significant drop, settling at 5,778 points, bringing the index below 6,000 points again.

Along with the index drop, the trading volume also decreased to Tk 4.809 billion – the lowest in the last nine trading days since the interim government took over.

On Aug 6 and 7, trading volumes exceeded Tk 7 billion on the first two days. On the night of Aug 8, the interim government assumed responsibility. In the following days, trading volumes reached billions, with one day surpassing Tk 15 billion and another day exceeding Tk 20 billion.

After the price adjustment, the market returned to a downward trend, and on Sunday, most shares lost value, causing the main index to settle at 5,778 points. Out of 366 companies, 18 saw gains, while 14 remained unchanged.

Even on Aug 11, the DSE’s general index, DSEX, rose by almost 300 points at one point, but the day ended with a 91-point gain. On that day, shares worth Tk 20 billion were exchanged.

The enthusiasm from the 786-point increase in the first four trading days began to wane from the next trading day. Although the index rose due to sharp increases in the share prices of large-cap companies like Grameenphone, Robi, British American Tobacco, and several companies in the banking and financial sectors, the prices of these shares began to decline, causing the index to fall.

The shares of other companies also declined to or near their previous levels.

Among these, the prices of Beximco Pharma and Shinepukur Ceramics – the two companies owned by Salman F Rahman – the former prime minister’s private sector and investment advisor – continued to fall, along with the price of Beximco Sukuk bonds.

Shinepukur Ceramics’ share price has been dropping continuously since Aug 8, from Tk 32.20. On Sunday, it traded at Tk 24.20. Over the last six trading days, the share price fell by Tk 8, a decrease of 24.84 percent.

Similarly, the price of Beximco Sukuk bonds also fell. During the same period, the unit price dropped from Tk 74.50 to Tk 57.50 in the latest trading. The price of each unit fell by Tk 17, a decline of 22.81 percent in six days. Beximco Limited’s share price remained steady due to the floor price.

Although trading began with a rise in share prices, as time progressed, the prices of other companies also fell, continuing until the end of the day.

President of the DSE Brokers Association of Bangladesh, or DBA, Saiful Islam does not see the recent price drops and the continuous substantial rise in the days following the fall of the government as ‘normal’ trading.

Speaking to bdnews24.com, he said, “The way the index and trading volume increased in the first few days was not normal. After the fall of the government, many thought the share prices of some companies would rise. They bought heavily, and now the prices are undergoing a correction.”

He added, “It will take some time to understand how the market will perform during the new government’s tenure.”

Along with the main index, the other two indexes of the DSE also decreased slightly from the previous day. The Shariah index DSES dropped by 24 points to 1,240 points, and the DS30 index fell by 52 points to 2,126 points.

The top three companies in terms of share price increases on the DSE were Daffodil Computers, Prime Finance First Mutual Fund, and Wimax Electrode Limited.

On the other hand, the top three companies in terms of share price declines were Meghna Petroleum, Alif Industries, and Legacy Footwear.