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Stocks on both bourses opened lower on Thursday as trading of five crisis-hit Islamic banks, which are undergoing a merger process, was suspended from the day.
The Bangladesh Bank has declared the five banks non-viable, and the suspension of their share trading will remain in effect until further notice, according to a disclosure by the Dhaka Stock Exchange (DSE) on Thursday.
Market analysts said investors had already been suffering from a prolonged confidence crisis, and the latest development concerning the Islamic banks further worsened market sentiment.
The central bank also dissolved the boards of the five troubled banks and appointed administrators as part of the formal start of the merger process.
The banks — First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and Exim Bank — are being merged into a new entity named Sammilito Islami Bank.
At a press briefing on Wednesday, Bangladesh Bank Governor Ahsan H Mansur said the net asset value of the troubled banks was between Tk 350 and Tk 420 in the negative per share.
“As a result, the value of shares held by both sponsor and general shareholders is considered zero, and no compensation will be provided,” he said.
The announcement upset investors, leading to a further decline in the market.
The DSEX, the key index of the Dhaka Stock Exchange, lost 19 points to 4,967 after the first hour of trading at 11:00 am, when the report was filed.
The DS30 index, comprising 30 leading companies, fell 4 points to 1,937, while the DSES index, which represents Shariah-based firms, dropped 5 points to 1,038.
Market liquidity remained weak, with turnover standing at Tk 1.15 billion after the first hour of trading on the DSE.
Of the issues traded till then, 203 declined, 95 advanced, and 77 remained unchanged.
The Chittagong Stock Exchange (CSE) also opened lower, with its All Shares Price Index (CASPI) losing 14 points to 14,013, while the Selective Categories Index (CSCX) dropped 3 points to 8,649 till then.
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