Top Listed Firms See Share Prices Plunge Up to 47% in Ten Months Amid Market Volatility
Dhaka, June 1, 2025 — Leading companies listed on the Dhaka Stock Exchange (DSE), including telecom giant Grameenphone, have experienced significant declines in their share prices since the political shift following the fall of the Awami League government. Over the past ten months, share prices of several blue-chip firms have plummeted by as much as 47 percent, contributing to a sharp fall in the benchmark DSEX index.
The DSEX index, which tracks the performance of all shares on the DSE, dropped by 1,192 points or roughly 20 percent, closing at 4,637 on Thursday, May 29, 2025. This decline marks one of the steepest equity market downturns in recent years and reflects ongoing volatility within the country’s financial markets.
An Initial Surge Fades
Following the political transition in early August 2024, the equity market initially showed signs of optimism. Investors hoped for economic stability and improved governance under the new administration, fueling a notable rally in large-cap stocks. Grameenphone, a key driver of market movement due to its substantial market capitalisation, soared by 53 percent to Tk 379.2 within just seven trading sessions after August 5, 2024. However, this rally was short-lived. Since reaching that peak, Grameenphone’s shares have undergone substantial fluctuations and closed at Tk 283.40 by late May 2025, representing a 25 percent drop from its August high. Other heavyweights such as Square Pharmaceuticals, Walton Hi-Tech Industries, British American Tobacco Bangladesh (BATBC), BRAC Bank, Robi Axiata, Investment Corporation of Bangladesh (ICB), Renata, Beximco, and Berger Paints Bangladesh followed a similar trajectory — initial gains post-government change were reversed by sustained sell-offs over subsequent months.
Market Dynamics and Investor Sentiment
Md. Ashequr Rahman, Managing Director of Midway Securities, observed that while the overall market remains under pressure, “junk stocks continue to rally without justified reasons,” creating a dichotomy in market behavior. Yet, he emphasized that the blue-chip stocks’ early appreciation was justified given their solid fundamentals and previous price restrictions due to floor price regulations.
“Following the fall of the previous government, prudent investors anticipated that fundamentally strong companies would benefit from renewed hopes of governance and economic betterment,” Rahman explained. He further noted the role multinational companies played in boosting blue-chip stock prices during this period. Prior to the political change, many multinational firms had restrained dividend declarations due to limited flexibility in repatriating funds overseas, resulting in large sums of foreign investment remaining idle. Post-August 5, these idle funds were injected into fundamentally sound companies, amplifying their stock prices temporarily.
Despite a record surge in the DSEX in early August 2024 — climbing 3.76 percent to 5,426 on August 6, then surging 10.85 percent to 6,015 by August 11 — investor enthusiasm waned as the rally lost momentum. Weak demand and stagnant macroeconomic indicators weighed heavily on market confidence.
Macroeconomic Challenges
A critical factor exerting downward pressure on the equity market has been slowing private sector credit growth. From 9.86 percent in August 2024, credit growth declined steadily, hitting a decade-low of 7.15 percent by January 2025. Despite the economy apparently moving in a positive direction due to contractionary monetary policies, liquidity remained insufficient in the equity market.
Rahman explained that banks, attracted by risk-free returns of 12 percent or more offered by treasury bonds, shifted their focus toward fixed-income securities. Following banks, many fund managers reallocated portfolios from equities to government bonds, further limiting equity market liquidity. Although yields on 5-year treasury bonds recently declined from 12.39 percent to 11.99 percent, this reduction failed to reinvigorate equity investments as anticipated.
Concerns Over Market Regulation and Outlook
Market participants also expressed dissatisfaction with the performance of the securities regulator amid the prolonged market decline. Rahman highlighted that even fundamentally strong stocks failed to attract investment interest in the current environment, a trend continuing to afflict the DSE.
The persistent downtrend has kept leading blue-chip companies among the top index draggers, pulling the market down further. For example, on May 26, 2025, Square Pharmaceuticals alone erased 6.5 points from the DSEX, which closed down 17 points that day. The next day, the market fell 41 points, with the top 10 index draggers, including Square Pharmaceuticals and BATBC, responsible for a loss of 32 points.
The equity market is also grappling with a large number of weak companies and a substantial burden of negative equity, estimated at Tk 97 billion, continuing to weigh on market sentiment.
Despite these challenges, there is cautious optimism about a revival. The government’s initiatives to augment the number of quality equities through the listing of multinational and state-run enterprises provide a potential catalyst for market recovery.
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Contact:
Mohammad Mufazzal
Email: [email protected]
The Financial Express
Dhaka, Bangladesh