All major index on the country’s two stock exchanges fell on Monday, August 4, as investors engaged in widespread profit-taking following recent price rallies. The main index of the Dhaka Stock Exchange (DSE), the DSEX, dropped by 50.23 points, or about 1 percent.
The banking sector was a key driver of the market correction. Of the 36 banks listed on the DSE, shares of 30 banks declined, accounting for 83.33 percent of the banking sector’s stocks. Only one bank’s share price rose, while five remained unchanged.
The banking sector has been instrumental in the recent upward momentum of the capital market, led notably by private sector giant BRAC Bank PLC. Over the last three months, BRAC Bank’s share price surged by approximately 54 percent, rising from Tk 45.90 on May 27 to Tk 70.70 on August 3. This growth is supported by the bank’s record profits over the last two quarters, with net profits increasing by Tk 315 crore (53 percent) year-on-year. Additionally, its subsidiary Bkash, a leading mobile financial service provider, has shown significant growth, attracting strong interest from both domestic and foreign investors.
However, the broad rise in banking shares included both fundamentally strong banks and some with weaker fundamentals, as investor enthusiasm for the sector lifted prices across the board. This uneven growth led many investors to take profits on Monday, triggering selling pressure and price corrections in banking stocks.
Among the top ten companies with the largest losses on the DSE, seven were banking institutions. Trust Bank PLC suffered the steepest decline, falling 8.97 percent in share price. CNA Textile followed with a 5.88 percent drop, while SBAC Bank lost 5.49 percent. Fareast Finance and Investment declined by 5.26 percent, and United Commercial Bank (UCB) fell 5.17 percent.
Other notable declines included NRB Bank (5.05%), First Security Islami Bank (4.87%), Mercantile Bank (4.71%), One Bank (4.44%), and Metro Spinning (4.20%).
The market correction reflects a natural cycle following strong rallies, with investors rebalancing portfolios amid concerns about overvaluation in some segments.
