Share prices of most of the banks fell on the Dhaka Stock Exchange on Wednesday amid turmoil in a number of crisis-hit banks and a negative vibe on the market, market operators said.
According to DSE data, 27 of the 36 listed banks saw their share prices fall on the day, while the share prices of five banks remained unchanged, and the remaining four saw an increase.
Wednesday marked the fifth consecutive losing session on the DSE, as investors continued to sell shares to prevent further erosion of their portfolios, market operators said.
DSEX, the key index of the DSE, decreased by 108.39 points, or 1.89 per cent, to close at 5,606.95 points, following a loss of 60.13 points in the previous session.
SM Galibur Rahman, head of research and investment strategy at Shanta Securities, said that investors were hesitant to invest in bank stocks due to banking sector issues revealed by the recent media reports.
鈥楽ome politically connected banks have been barred from disbursing loans. The Bangladesh Bank governor recently stated that not all the money looted from banks might be recovered. As a result, investors no longer see the banking sector as a profitable area for investment,鈥� he said.
On August 19, the Bangladesh Bank restricted lending activities of S Alam Group-controlled six banks to safeguard depositors鈥� money.
In this connection, the central bank issued separate notices to the banks 鈥� Islami Bank Bangladesh, Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank and Bangladesh Commerce Bank.
Galibur added that if all of the money could not be recovered, the equity of the banks would decrease, meaning that bank shares were currently overpriced, which had also negatively impacted bank shares.
According to the EBL Securities daily market report, the banking sector witnessed decrease in its return, by 1.7 per cent.
An expert said that the overall situation of the banking sector was fragile currently.
Mirza Azizul Islam, a former BSEC chairman, said that the amount of nonperforming loan in the bank sector was increasing.
鈥榃e are reading and watching media reports about how businesspersons with political connections have embezzled money from various banks. Besides this, there are criticisms about the governance in the banking sector. Recently, the newly appointed governor of the Bangladesh Bank addressed some issues regarding the banking sector. All of these are having impacts in the share prices of banks,鈥� he said.
Market operators said that investors were worried about the country鈥檚 economic situation amid the media reports about corruptions in the banking sector.
The total turnover on the DSE increased by a little bit on the day, posting Tk聽536.83 crore compared with that of Tk聽518.61 crore in the previous session.
Of the 394 issues traded on Wednesday, 11 advanced, 371 declined, and 12 remained unchanged.
The DSE Shariah index decreased on the day, by 28.28 points, or 2.30 per cent, to close at 1,201.41 points on the day.
The DS30 index lost 45.63 points, or 2.18 per cent, to finish at 2,047.62 points.
