Investors remain disinterested in bank stocks due to a bleak outlook marked by key indicators. Manipulation is also unattractive, given the higher free float of bank stocks. Consequently, eight banks and non-bank financial institutions (NBFIs) have seen their stocks linger below their Tk 10 face value, a sharp contrast to their once-lucrative status in the market.
This situation to low intrinsic values is rooted in the inability of banks to generate sufficient cash flow for their large non-performing loans (NPLs) and inadequate provisions for future challenges. Furthermore, the vast number of bank and NBFI shares has deterred large investors and general investors who prefer manipulated stocks. Confidence in the sector is low, with analysts highlighting its struggles, leaving investors unsure about the sector’s strength. This lack of confidence has resulted in undervalued bank stocks. Nevertheless, some banks and NBFIs maintain corporate governance, adhere to regulations, and pay dividends, contributing to their undervaluation due to investor reliance on rumors and a preference for manipulated stocks.
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