The Dhaka Stock Exchange (DSE) extended its losing streak on Tuesday, with the benchmark DSEX index sinking to its lowest level since 9 July, as investor confidence continued to erode amid mounting political uncertainty.
The broad-based index dropped 41.9 points or 0.82% to close at 5,019, according to post-session data. “Investors continued trimming equity exposure amid a prolonged confidence crisis,” said EBL Securities in its market commentary.
Out of 397 traded issues, 56 advanced, 274 declined and 67 remained unchanged, reflecting widespread selling pressure.
“It is really surprising how quickly market sentiment turned negative,” said retail investor Azmal Hossain from a Motijheel trading floor, as the index broke below the recent low of 5,026 points.
DSEX had rallied to over 5,600 points in early September, up from 4,600 at the end of June, on optimism about an interest rate decline. However, around 60% of those gains have now been wiped out over the past two months.
Stockbrokers and analysts attributed the decline to prolonged political uncertainty that initially triggered profit-taking near the market peak and later drove defensive sell-offs by cautious investors.
Turnover on the DSE fell by 12.5% to Tk 454 crore on Tuesday, down from over Tk 1,000 crore during the recent rally, as traders avoided new positions without a clear political signal.
“Selling pressure dominated from the opening bell, with most investors preferring to stay on the sidelines while waiting for stability,” said market analysts.
Asif Khan, president of CFA Society Bangladesh, said he was not surprised by the sharp rebound in July-August. “Such moves are common when interest rates begin to reverse,” he said. “However, many investors booked profits as the political climate remained cloudy and the economy’s recovery was still weak.”
He noted that most corporate disclosures this quarter were disappointing, except for a few blue-chip firms. “Still, patient investors are not ignoring the long-term opportunities,” said Khan, who also chairs Edge Asset Management.
“Several leading companies are now trading at their cheapest levels in nearly two decades compared to their earnings and growth,” he said, adding that long-term positioning in fundamentally strong stocks would be wiser than chasing short-term swings.
On sectoral performance, paper, life insurance and jute led the decline, falling 3.8%, 3.3% and 2.3% respectively. In contrast, services and telecom edged up 0.4% each.
