Muhammad Ayub Ali :
The country’s stock market has faced a series of unprecedented and unforeseen events in 2024, including record-low transaction volumes, the embezzlement of trillions of takas through price manipulation, pressures from negative equity, and numerous trades that have breached securities laws and floor price restrictions.
The situation has been further aggravated by money laundering abroad, a crisis in foreign exchange reserves, a loss of investor confidence, political unrest, and the July-August revolution.
As a result, many investors have lost their capital and found themselves in dire financial straits, culminating in a ‘long march of investors’ that led to the siege of the Bangladesh Securities and Exchange Commission (BSEC) office, where the main gate was locked.
This year has proven particularly challenging for investors, surpassing the hardships experienced in 2010. The circumstances are so severe that the face value of some shares has plummeted below Tk10.
Data from the Dhaka Stock Exchange (DSE) reveals that on January 1, 2024, the main index, the DSEX, was at 6,232.87 points. By December 19, the DSEX index had fallen to 5,221.57 points, representing a decline of 111.30 points or 16.22 percent over the year.
On October 27, the index dropped by 149.20 points to 4,965.39 points, marking the lowest level in four years. The previous low was recorded on December 2, 2020, when the DSE index fell to 4,934 points.
At the beginning of the year, the DSE’s Shariah Index (DSES) stood at 1,361.23 points, but by December 19, it had decreased to 1,167.35 points, a drop of 193.88 points or 14.24 percent over the year. Similarly, the DS30 index, which started the year at 2,091.54 points, fell to 1,938.29 points by December 19, a decline of 153.25 points or 7.32 percent.
The market capitalisation of the DSE was Tk780,823.42 crore, but it has since fallen to Tk660,160.9 crore, resulting in a loss of Tk120,662.5 crore.
The past year has been incredibly frustrating for both market intermediaries and investors, with many facing bankruptcy due to the challenging market conditions. Share price manipulation by large entities has been a significant concern throughout the year, particularly in light of the ongoing political turmoil.
A draft of the White Paper on the state of the economy indicates that trillions of takas were embezzled from the stock market through fraud, manipulation, and deceit during the initial public offering (IPO) process under Sheikh Hasina’s administration.
Although only 15 percent of Bangladeshi stock market investors use margin loans, negative equity in these accounts has surged to over Tk9,700 crore, accounting for 56 percent of all outstanding investor loans that have soured, leading to the collapse of brokerage firms and merchant banks.
A total of Tk1,375 crore has been raised from the capital market through initial public offerings (IPOs) and two qualified investor offers, while two banks have raised capital by issuing bonds.
Towards the end of the year, a reduction in the tax on capital gains from the sale of shares in listed companies was announced, with the tax rate set at 15 percent on capital gains exceeding Tk50 lakh.
Additionally, a loan waiver of approximately Tk3,000 crore to the Investment Corporation of Bangladesh (ICB) at a low interest rate was viewed as a hopeful measure from the BSEC.
