The banking sector has experienced annual erosion of stocks’ market capitalization to the economic volatility at a higher rate than the overall market, with the newly-listed Union Bank and Global Islami bank excluded from the scene.
The Dhaka Stock Exchange’s equity dropped 11 per cent or Tk 578 billion in the 12 months through December 13, 2022 while the banking sector has its market valuation reduced by more than 12 per cent.
Union Bank was listed with the prime bourse in January through the biggest initial public offering (IPO) among the listed banks while Global Islami Bank entered the market in November via the second highest IPO.
The two banks have been kept out of the calculation since the period under consideration is short to judge the performance of the stocks, with the imposition of the floor price during the time.
Minus the two, the listed 32 other banks are feared to lose its market value further if the price movement restriction is lifted.
Investors have been turning away from bank stocks as the sector has been smeared by financial scams, increasing bad loans, and liquidity crunch.
The latest media reports on a loan scam in Islami Bank Bangladesh dented investors’ confidence further.
While customers are lining up to withdraw their deposits from the Shariah-based bank, stock investors are mounting pressure to sell-off their holdings.
The irony is that bank stocks have the…
