Telecommunication sector has lost its market cap crown to pharmaceuticals for the first time on Dhaka Stock Exchange (DSE) as share values of heavyweight Grameenphone (GP) tumbled last week.
The sector recently came under pressure due to latest development on merger talks of two non-listed telco firms—Robi and Airtel.
The market capitalisation is calculated by multiplying a company’s floating shares by the current market price of one share.
The investment community uses this figure to determine a company’s size, as opposed to sales or total asset figures.
“The market ended the over one-year-long reign of teleco as the largest market capitalisation sector, as developments like merger talks between Robi and Airtel and mobile number portability significantly threatened the competitive advantage of telecom giant GP,” said IDLC Investments.
The country’s largest mobile phone operator GP’s bad days started since merger talks began of the two firms. That development sent the company’s shares tumbling around 10% to Tk285 a share on DSE in the last one month.
As of last week, the telco market cap stood at over Tk40,00 crore, down 32% from over Tk53,000 crore a year earlier and hitting the market cap.
The sector, which snatched the market cap crown from banking sector a year back when share prices of GP crossed Tk300 a share, made up over 14.6% of the total market cap of the DSE and occupied third position.
The market cap of pharmaceuticals sector – the new market cap crown holder – was over Tk42,00 crore, which accounted for more than 15% of total DSE market cap.
It gained its pace driven by the country’s two leading drug makers – Square Phrama and Beximco Pharama.
Share prices of the two heavyweights in the sector kept rising after the news that the US Food and Drug Administration approved the factories of Square and Beximco.
The approval makes them eligible to export drugs to US if the FDA clears their drug list.
Banking sector that dominated the market for long was now the second highest market cap holder that accounted for 14.7% of the total DSE market cap.
It lost its crown to teleco sector in market cap for the first time on DSE in September last year, when share prices of banking stocks were battered by slowed down investment and rising non-performing loan.
