Some 125 publicly-traded companies in the manufacturing and service sectors have expressed fears of heavy losses due to the ongoing coronavirus outbreak. Among them, 116 companies are in the manufacturing sector, such as RMG, cement, ceramics, engineering, and tannery sector. The other nine are in the real estate and service sector. These companies are listed on the country’s prime bourse Dhaka Stock Exchange (DSE), out of a total of 321 listed companies. Talking to Dhaka Tribune, higher officials of these companies said they forecast a huge decline in revenue in the third quarter and annual profit from after the pandemic began. Stock market insiders said the coronavirus outbreak had cast a negative impact on the revenue and net income of companies in the manufacturing and service sector. Therefore, investors will be deprived o their profits. Meanwhile, some listed companies have also suspended productions due to the lack of demand and disruption in the global supply chain, and also to minimize spread of the virus among employees.
Impact on listed companies in the manufacturing sector
Industry insiders have expressed concerns over a huge fall in earnings of 56 export-oriented textile and apparel companies listed at the DSE. Global clothing brands and retailers have cancelled import orders worth $1.40 billion from Bangladesh after the pandemic hit their business badly, mostly in the European and US markets. According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), a total of 347 apparel exporters faced work order cancellations worth $927 million. Another 220 exporters belonging to the BKMEA also faced cancellations of work orders worth $480 million. The pandemic also slowed down the cement, ceramics, and the engineering sector. There are 51 companies in this sectors listed with the DSE. Bangladesh Steel Manufacturers Association General Secretary Md Shahidullah said his sector is now facing a shortage in raw materials as European nations and the United States, where the raw materials usually comes from, has been gripped by the coronavirus outbreak. Shahidullah, also vice-president of the Bangladesh Cement Manufacturers Association, said the cement companies used to meet the demand of government projects, corporate projects, and individual homebuilders, but in the current situation, all their activities have come to a standstill. Earlier on April 12, LafargeHolcim Bangladesh declared layoffs at its head office in Dhaka due to a fall in sales from the shutdown enforced to curb the spread of the virus. Standard Ceramic Industry has already closed its factory due to the outbreak. Beside, the six listed tannery and footwear companies had kept their operations halted since the general holidays began on March 25. Industry insiders fear many of these companies will collapse and many employees might lose their jobs.
Listed service sector companies business takes a hit
There are nine companies listed with DSE under the services category, which includes real estate, travel, and leisure. These companies also fear that their income will plummet due to the prolonged shutdown of business operations for the coronavirus outbreak. The pandemic has put a break on the country’s real estate sector from a turnaround, which industry insiders say might cause job cuts of at least 3.5 million people. Real Estate and Housing Association of Bangladesh (REHAB) Vice President Liakat Ali Bhuiyan told Dhaka Tribune, that the housing sector and other related businesses have been facing massive financial losses due to the pandemic. “From 2007-08, the housing sector began to sustain losses, which we were able to turn around from 2018 onwards. But, realtors are now again facing losses due to Covid-19. It is not yet certain on how much damage the sector will have to sustain,” he added. Beside, listed companies running hotels are facing massive losses, as bookings were cancelled starting from March amid concerns over spreading of the deadly virus. Shanta Asset Management Chief Executive Officer Emran Hasan told Dhaka Tribune: “Some sectors in the capital market will suffer more than others due to the outbreak. On the other hands, some sectors can do better, such as the pharmaceutical sector. “The investors need to keep these issues in mind while investing,” he suggest. To ensure social distancing amid the Covid-19 pandemic, the government on March 26 declared a 10-day general holiday. Later, the holiday was gradually extended till April 25 as the country witnesses a rising number of cases and deaths from Covid-19, the disease caused by the novel coronavirus. The general holiday, which had been restricting movement of people, suspending all types of public transports and closing all businesses, was again extended till May 5. Covid-19 has claimed 177 lives and infected 9,455 people in Bangladesh as of Sunday.
