Ahsan Habib

Four state-run commercial banks (SCBs) in Bangladesh are struggling to generate revenue from their core business of lending due to voluminous non-performing loans and the lending rate ceiling.

Delta Brac Housing Finance Corporation, a listed non-bank financial institution in Bangladesh, recently announced that it has decided to change its name by adding PLC as a suffix. 

While most stocks in Bangladesh remain bearish, some surged in the first half of January fuelled by rumours.

Most of the global stock indices plunged last March when the war between Russia and Ukraine escalated but they took only two months before bouncing back despite the conflict-induced turmoil worldwide.

One-third of the listed banks in Bangladesh, especially the shariah-based lenders, suffered a drop in profits in the last five years due to the deterioration in their asset quality, higher non-performing loans, and the impact of the coronavirus pandemic. 

In another financial felony in Bangladesh, UFS Asset Management has embezzled Tk 158 crore in investors’ funds, according to a probe of the stock market regulator.

Major indices of the stock market in Bangladesh mostly saw decline throughout the outgoing year while turnover also took a plunge amid the gloomy economic scenario.

The number of beneficiary owners (BO) accounts has decreased over the last six months in spite of the advent of 60 new stockbrokers in the stock market amidst expectations that the number of investors would increase. 

The biggest challenge the stock market faced in the outgoing year was floor price as the artificial mechanism made the whole market illiquid and shattered investors’ confidence amid the gloomy economic trends. 

Brokerage houses are in dire straits meeting their operating costs as low turnovers are leaving a massive dent in their incomes.

Unusual investment decisions made by the state-run Investment Corporation of Bangladesh (ICB) could inflict a loss of Tk 438 crore on taxpayers as the funds have either turned into default loans or remained largely unrealised, according to an audit report.

Once one of the most sought-after securities, banking stocks in Bangladesh are now struggling as investors have stayed away from them for the last couple of months due to a lack of trust in their financial reports,

Most of the blue-chip stocks such as British American Tobacco, Grameenphone, Renata, and Singer Bangladesh are failing to attract investors even though they are up for grabs at floor prices as investors fear that the market will fall if the floor price is lifted given the current gloomy economic scenario.

National Bank Ltd (NBL) that raked in Tk 550 crore in annual profit a few years ago incurred unprecedented losses of Tk 357 crore in January-September of 2022 due to lower interest incomes and higher non-performing loans.  

Businesses in Bangladesh went through a tough time in recent months due to a dearer US dollar that pushed up their costs of raw materials and a rocketing fuel bill that contributed to the surge in operating expenses. 

Most state-run listed power and energy companies secured higher profits year-on-year during the July to September period while ripple effects of the Russia-Ukraine war, including skyrocketing energy prices, had been turning lives of the masses topsy-turvy. 

Sinobangla Industries had not secured exorbitant profits that could have supported a high jump in its share price.  

Most of the drug makers in Bangladesh posted lower profits in the January to June period of 2022 owing to the higher cost of raw materials driven by a continuous fall of the local currency against the US dollar. 

The involvement of listed and non-listed companies in the manipulation of stocks is growing, an ominous sign for a market already facing a confidence crisis.     

The government should stop fund wastage in the energy sector and eventually phase out subsidies, which have created pressure on the public coffer, according to economists and entrepreneurs.