Muhammad Ayub Ali :
Despite the country’s banking sectors being struggling to survive, especially Islamic banks, due to the liquidity crunch still investors are showing good interest in bank stocks.
Analyzing the Dhaka stock exchange data showed that the banking sector has recently been making top contributions to daily turnover, supported by investors’ increased participation.
Banking stocks dominate around 23 percent of the total turnover, mainly driven by two banks — Midland Bank and NRB Bank. The two lenders topped the chart of turnover leaders on the Dhaka Stock Exchange (DSE).
On the sectoral front, bank stocks contributed the highest turnover at 17.9 percent, followed by pharmaceuticals at 12.6 percent and food at 9.7 percent.
Most of the time investors feel safe in bank stocks because they can instantly convert to liquid money compared to the other stocks, said Md Saiful Islam, president of DSE Brokers Association of Bangladesh (DBA).
Compared to the dividend of the bank stock the price is more attractive, he added.
Generally, most investors seem to think that bank stocks are safer and safer than others but it is not true, he explained.
NRB Bank was the top traded stock in terms of value, with Tk24.20 crore.
Earlier on Wednesday, the premier bourse featured a turnover of Tk 4.51 billion, of which 16.6 percent or Tk 750.6 million came from transactions of bank shares. On the day, NRB Bank was the number one turnover leader, with a transaction value of Tk 138.3 million. Midland Bank was also on the chart of top 20 turnover leaders.
In the previous session on Tuesday, the banks contributed Tk 832 million to the daily turnover, and NRB Bank was the number one turnover leader.
Usually, the pharmaceuticals & chemicals sector sees high transactions on the premier bourse. Recently, the banking sector outstripped the pharmaceuticals & chemical companies regarding turnover value.
NRB Bank experienced a decline in earnings year-on-year in July-September this year. The bank has reported an EPS (earnings per share) of Tk 0.12 for July-September, down from Tk. 0.86 (restated) for the same quarter last year.
Midland Bank also reported a year-on-year decline in earnings for July-September this year. Its EPS fell to Tk 0.09 for July-September from Tk 0.22 for the same period of the previous year.
Some banks are securing a wider interest spread — around 3 percent from Treasury bonds.
The performance of other sectors was not satisfactory in the first quarter of FY25.
The blue-chip DS30 index also dipped slightly, ending the day 1 point lower at 1,916.
Among the traded stocks, 125 advanced, 196 declined, and 69 remained unchanged, according to DSE data.
