Listed DSE companies incurring loss: No recovery in sight

The impact of the ongoing economic crisis is now statistically visible in businesses. Yesterday’s report said that around 70 per cent of listed companies with the Dhaka Stock Exchange (DSE) either suffered losses or witnessed lower profit in the July to December period of the current financial year.

So far, among the 400 companies, 214 have published their financial reports for the first half of 2022-23. Of them, the profits of 64 companies rose year-on-year and it dropped for 84. There is no sign of improvement in the economy anytime soon. The future of businesses is bleak indeed. Harder days are ahead for general people.

This slump in profit and increase in loss for companies is due to a spike in the production cost and a much devalued Taka against the strong US dollar. Since people in general are earning less now, fall in the business is also attributed to lower consumption. In other words, it means people are now eating less or forced to go through starvation.

 Usually, the listed companies with the DSE are businesses with moderate or large capitals. If the financial report of these companies is in this state, it does need much intelligence to guess that many small businesses have already shuttered their ventures altogether. With companies’ lower profit or loss the inevitable will come: they will go for reduction of manpower sizes. There are now many educated people who once had jobs but are now without any work. An atmosphere of frustration and gloom is now pervading everywhere, excepting the ruling class and the opportunists few.

The banks, financial institutions, insurance companies and most multinational companies listed with DSE are yet to reveal their earnings as they follow the calendar year as their financial period. When these companies publish their quarterly reports, it can be said with a great degree of certainty, the situation could be similar or even worse.

True, the sharp depreciation of the local currency and the escalated input costs and energy prices as a result of war and pandemic have dragged profits down for the listed companies, but this is not the whole truth. Mismanagement and corruption are also equally responsible for the current hopeless economic scenario.

Loss or less profit of companies has already hit hard the small investors who are perhaps the unluckiest fellows. Under the Awami League-led government, they fell prey to market manipulations several times losing their investment.