Political Links Backfire as Shares of Awami League-Linked Firms T

Despite a rising stock market over the past month, shares of companies associated with directors connected to the previous Awami League-led government have seen notable declines, reflecting investor concerns following the political regime change.

Although the DSEX benchmark index of the Dhaka Stock Exchange (DSE) rose by 500 points, or 9.54 percent, over the past month, stocks linked to political figures suffered major losses. Analysts believe the downturn stems from fears that companies previously protected by political influence may now face financial or legal setbacks.

“Investors are nervous that the fall of political guardianship could affect company operations, especially those with questionable corporate governance,” said Minhaz Mannan Emon, former DSE director. “The fear of regulatory scrutiny, including possible Anti-Corruption Commission (ACC) action, is prompting sell-offs.”

Among the major losers was Beximco Pharmaceuticals, which dropped 26 percent in one month. Its vice-chairman, Salman F Rahman, was the former prime minister's private industry and investment adviser. Shares of Beximco Ltd remain frozen at their floor price due to regulatory price limits, while Shinepukur Ceramics, also owned by Rahman, fell 39 percent.

Sea Pearl Beach Resort, Summit Power, Sonar Bangla Insurance, Sandhani Life Insurance, BD Thai Food, and Doreen Power — all with past political affiliations — also saw their stocks lose significant value. For example:

• Sea Pearl, owned by former AL MP Md Aminul Haque, fell 22 percent.

• BD Thai Food, where family members of ex-health minister Zahid Maleque sit on the board, dropped 15 percent.

• Summit Power, linked to ex-commerce minister Faruk Khan’s family, declined 14 percent.

• Sonar Bangla Insurance, associated with Sheikh Hasina’s relative Sheikh Kabir Hossain, dipped 5 percent.

• Sandhani Life, led by former state minister Ahsanul Islam, slipped 12 percent.

• Doreen Power fell 20 percent.

Meanwhile, some banking stocks displayed an opposite trend. United Commercial Bank (UCB), once under the control of former land minister Saifuzzaman Chowdhury Javed, saw gains after political ties were severed in August. IFIC Bank, chaired until recently by Salman F Rahman, also saw its share price rise. Other banks with S Alam Group affiliates on their boards also recorded upward movement, supported by reform efforts from the interim government and changes to board compositions.

A senior asset manager, requesting anonymity, said some business figures used political leverage to secure lucrative government contracts. “With those connections weakening, the long-term financial outlook for such companies is now uncertain,” the manager said.

However, analysts also warned investors not to panic unnecessarily. “If the companies are fundamentally strong and follow proper corporate governance, they will likely survive and recover,” said Emon. “But the perception of political dependency is what’s currently driving the sell-off.”

Image Suggestions for the News:

1. Stock Trading Screen Showing Decline

   • A photo of a trading screen highlighting specific falling stocks, with red indicators, preferably from DSE.

2. Dhaka Stock Exchange Exterior with Investors

   • DSE building with small groups of concerned investors gathered outside.

3. Businessmen Silhouettes with Politicians in Background (Illustration Style)

   • Symbolic image showing shadowy figures of businesspeople with a political backdrop, suggesting influence and risk.

4. Red Falling Arrow Over Corporate Logos (Illustrative Collage)

   • A downward arrow superimposed over company logos like Beximco, Shinepukur, Summit Power, Sea Pearl, etc.

5. Court Gavel Over Business Documents

   • Symbolizing legal or regulatory actions that investors fear may follow regime change.