Despite ongoing geopolitical tensions in the Middle East and a generally bearish sentiment in the broader market, the Dhaka Stock Exchange (DSE) witnessed an unusual rally in several weak and loss-making companies during the month of March. Most notably, Non-Bank Financial Institutions (NBFIs) currently on the central bank’s liquidation list dominated the top gainers’ chart.
According to DSE’s monthly performance data, five of the top ten gainers in March belonged to the struggling NBFI sector. These stocks, many of which had been trading at rock-bottom prices, saw triple-digit or near-triple-digit percentage increases.
Unnatural Growth in Distressed Assets
The surge was led by International Leasing and Financial Services, which saw its share price skyrocket by 100%, rising to 3.20 BDT. Other notable performers included:
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Premier Leasing & Finance: Increased by 83.33% to reach 3.30 BDT.
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People’s Leasing & Financial Services: Rose by 76.47% to 3.00 BDT.
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Fareast Finance: Also climbed 76.47% to 3.00 BDT.
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FAS Finance & Investment: Grew by 70.59% to reach 3.90 BDT.
Market analysts describe this trend as highly speculative, as most of these companies are fundamentally weak, low-cap “penny stocks” that have been mired in liquidation uncertainty and restructuring issues for years.
Other companies rounding out the top gainers’ list included Hamid Fabrics, Familytex (BD), IFIC Bank First Mutual Fund, Atlas Bangladesh, and Pacific Denims.
Market Overview: Mixed Performance
While these specific stocks surged, the overall market mood remained subdued. Out of the 390 issues traded in March:
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Gainers: 173
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Losers: 183
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Unchanged: 34
Total turnover for the month reached 10,211 crore BDT. The manufacturing sector (including pharmaceuticals, textiles, engineering, cement, and food) remained the primary driver of liquidity, contributing 46.86% ($4,785 crore BDT) of the total volume. The financial sector (Banks, NBFIs, and Insurance) accounted for 29.97%, while the services and miscellaneous sectors contributed 23.09%.
Expert Take: Speculation Over Fundamentals
Market insiders suggest that after a prolonged period of decline, these NBFI shares had hit absolute floor prices. The sudden spike is largely attributed to speculative trading rather than any improvement in corporate earnings or financial health.
“Investors are often drawn to these low-priced stocks during market stagnancy, hoping for quick gains, even when the underlying companies face liquidation or severe financial distress,” noted a senior market analyst.
The surge comes at a time when the broader economy is navigating high inflation and global energy price volatility, prompting regulators to keep a close eye on “unusual” price movements that lack fundamental justification.
