Another eventful year is coming to an end. The year 2024 will be a year of discussion in the history of Bangladesh due to the changes that began in the country with the fall of the Sheikh Hasina government through the student-public uprising. However, it will be marked as another bad year for stock market investors. This year too, people who came to invest in the hope of profit have lost capital.
The regulatory body BSEC itself paralyzed the market throughout 2023 by interfering with one floor price after another and later with circuit breakers in share prices to prevent price decline. These measures to prevent artificial decline were withdrawn by the former commission in January 2024. This led to a collapse in many shares, the consequences of which have not yet been healed. The BSEC also stopped the category change of bad shares for four consecutive years by issuing illegal instructions. This measure was lifted last May. As a result, many shares were classified as Z category in a short period of time. Their prices also fell significantly.
Due to the artificial system, the share price and the main price index were almost stagnant in 2023 compared to 2022. Despite that, it rose by 39 points to 6246 points. However, in 2024, it lost 1042 points and fell to 5184 points. The index fell by 16.68 percent.
The IPO market has been in a drought in the past year. Five companies have IPO at a price of Tk 661 crore. Of these, two have come under the fixed price method; one is a bank and the other is an insurance company. The IPO of these two companies was Tk 116 crore. The remaining three companies came under the book building method, whose IPO size was Tk 545 crore.
The two companies that were listed after the IPO under the fixed price method are still being traded at a higher price than their face value. However, the picture is different for companies listed under the book building method. The price of Best Holdings’ shares with a face value of Tk 10 was fixed at Tk 35 in the bid proposal of institutional investors. However, it is sold to general investors at Tk 24. Now the price of the share is Tk 18.
Asiatic Laboratories’ share price was set at Tk 50 by institutional investors. It was sold to general investors in the IPO at Tk 20. Now the share price is Tk 35. Techno Drugs’ share price was set at Tk 34 by institutional investors. It is sold to general investors at Tk 24. Although it reached a price of about Tk 70 at the beginning of the listing, the share price is now Tk 35.
Needless to say, behind such a miserable state of the stock market was the weak regulatory framework and the lack of investor confidence in BSEC. Former BSEC Chairman Professor Shibli himself, sitting in the top position, traded shares. He helped the manipulation circle to artificially increase the share price, which was not unknown to investors. As a result, real investors turned away. Again, some investors have emerged who are looking forward to profit even in any bad situation. They are opposing the steps to remove the bad systems of the past and take action against those responsible to create a favorable environment for long-term investment.
After the formation of the interim government, a new BSEC commission was formed under the leadership of former banker Khandaker Rashed Maksud. Although the commission started an investigation into past irregularities and corruption, nothing is yet visible. A task force was formed to get recommendations for long-term reforms of the stock market, but nothing has come out of it yet. As a result, frustration among investors has increased.
The current commission has sparked discussions by imposing large fines on influential people, anonymous account holders and MDs of listed companies, and the masterminds of the discussed stock manipulations in the past years. However, there are doubts whether these fines will be collected at all.
Meanwhile, the stock market is declining due to reduced liquidity supply. Last week, the amount of shares traded in the Dhaka Stock Exchange (DSE) fell below Tk 300 crore, which is the lowest during the tenure of the current interim government.
