In five weeks of February-March 2020, the broad index of the Dhaka Stock Exchange (DSE) fell by nearly 15% as investors feared the virus that had already entered Bangladesh
While stepping into 2020, the country's stock market had been in a downturn for more than two years due to poor confidence and a tight money market.
The market was trying to recover its losses in the initial weeks of 2020, but suffered a panic-selling spree since the last week of February as soon as Covid-19 widened its reach worldwide.
In five weeks of February-March 2020, the broad index of the Dhaka Stock Exchange (DSE) fell by nearly 15% as investors feared the virus that had already entered Bangladesh.
The fall could have been worse had the market regulator not come up with the floor price for individual stocks that still exists.
However, those days a year ago are almost forgotten as the market demonstrated its long-awaited turnaround since the shutdown was lifted at the end of May last year.
Panic turned into rational bargain hunting as soon as investors saw the market confidence in the new regulator, central bank stance for a much liquid money market, and the government's massive stimulus for pandemic-affected businesses.
When interest rates began to fall significantly, investors turned to the stock market at the second half of the year and the Dhaka bourse went at the top of global return table for the July-December period.
DSEX, the benchmark at the DSE, rallied to above 5,900 points in recent weeks, which fell below 3,600 points in March last year.
The significant drop in interest rates is the most significant factor to drive the rally, said chartered financial analyst and a financial risk manager Shahidul Islam, chief executive officer of asset management firm VIPB Asset Management.
As investors saw less than 5% annual return from fixed deposits and high interest national savings schemes shut the doors for millionaires, they preferred the stock market, said Md Moniruzzaman, CFA, vice president of Bangladesh Merchant Bankers Association (BMBA).
Both the investment experts believe like the economy of Bangladesh listed companies performed better than what was expected, defying the pandemic.
Of course, not all the sectors and companies equally recovered in business and performed in the stock market.
Also the pandemic's effects on companies are different based on their nature of business, strength to withstand headwinds, innovation and bargain.
The pandemic gainers, losers, and withstanders
All over the world, sectors which were supporting people's new way to live amid the pandemic – including distant work, home delivery, online entertainment, personal protective equipment, sanitizers, coronavirus fighting drugs and nowadays vaccine producers – saw a boost in business and stock price.
Bangladesh also saw the same and increased sales of companies like sanitizer and toiletries maker Reckitt Benckiser Bangladesh, from drugs to consumer items manufacturer ACI, textile to PPE maker Beximco, bulk internet data supplier Submarine Cable Company, data revenue of telecom operator Grameenphone, biscuit giant Olympic reflects that.
Stock price of the companies also recovered well with 20-430% gains since the shutdown ended in June 2020.
Market research reports by top brokerage firms reveal pharmaceuticals, telecommunication, IT, consumer products, food and beverage sectors have done fairly well over the last one year which is reflected in their increase in market capitalisation, sales and corporate earnings.
However, 2020, the biggest year of disruption in life of almost all the listed companies and investors, more or less disrupted every company's financials and they tackled those as much as their capability supported, said Moniruzzaman, also the managing director of IDLC Investments.
The multinational companies recovered from the shutdown impacts very fast as they managed sales recovery and even growth in recent quarters, and cut less important costs when needed.
At the same business market, Olympic posted business growth, while Bangas suffered decline.
Since the shutdown ended in the Mid-2020 when life began to return to normalcy and the wheels of the economy began to roll again, sectors like construction materials, automobiles, textile, travel and leisure, real estate and services began to see recovery.
Going through ups and downs, most managed to withstand the 2020 storm with little more or less sales and profits, compared to those a year ago.
The list includes cement, steel, paper and printing, automobile, services and real estate sectors.
On the other hand, due to market demand at home and abroad alongside industry dynamics, textile and apparel, travel and leisure, tannery and footwear are found to be the sectors that are still losers in business and also in the stock market.
Of course there are exceptions within sectors that outperformed their sectoral peers.
The worst is over as the vaccine is here, and companies are expected to do better in coming days, according to both the experts Shahidul Islam and Moniruzzaman.