On March 9, 88% of textile and apparel stocks on the DSE were effectively untradeable. They were either pinned to floor prices or frozen at 1% circuit breaker limits. No bids. No buyers. Just sellers staring at screens waiting for a market that had stopped functioning for Bangladesh’s largest export sector.
The DSEX dropped 209 points to 5,325 — a 3.77% collapse and the steepest single-day fall in six years. But the headline index understates what happened to textiles and RMG. The broad market crashed. The textile sector went illiquid.
The question is no longer whether these stocks are cheap. It is whether the factories behind them can keep the lights on.
Two Crises Arriving Simultaneously
Start with energy. QatarEnergy declared force majeure on March 2, halting LNG shipments that Bangladesh depends on for industrial power generation. Four of five state-run fertilizer plants shut down. Three-hour daily power outages became the norm. Factories that need continuous gas pressure to run spinning mills and dyeing units found themselves operating at 40–50% of normal capacity.
Then add geopolitics. Iran’s threat of attacks on ships transiting the Strait of Hormuz — the chokepoint through which Bangladesh sources its LNG — created a second layer of uncertainty. Even if QatarEnergy lifts its force majeure tomorrow, the shipping route itself is now a risk variable that was not in any factory’s operating model six weeks ago.
These are not independent shocks. They compound. Reduced gas supply raises per-unit energy costs. Geopolitical risk raises shipping and insurance costs. Both hit an industry where margins were already under pressure from a metric that predates the current crisis entirely.
The Numbers Behind the Illiquidity
RMG exports fell 7.5% year-over-year before the energy crisis escalated. That baseline weakness matters because it means the sector entered this shock without a cushion.
Malek Spinning Mills (MSPM) traded at Tk 25.10 on March 9, near the bottom of its 52-week range of Tk 21.50 to Tk 36.20. The price reflects a factory system running at half capacity with no timeline for recovery. But MSPM at least traded. Most of its peers did not.
When 88% of a sector’s listed stocks cannot find buyers at any price, that is not a valuation problem. It is a liquidity crisis. Investors are not debating whether textile stocks are undervalued — they are refusing to hold them at all. The distinction matters because conventional valuation metrics like P/E ratios assume a functioning market. A stock stuck on its floor price has no functioning market.
The DS30 blue-chip index fell 4.0% to 2,050, confirming this was not a small-cap panic. Even diversified conglomerates with textile exposure, like Beximco, could not escape the sector’s gravitational pull.
The Credit Wall Nobody Is Talking About
Energy is the visible crisis. The invisible one is credit.
Non-performing loans across the entire banking system hit 35.73% of all outstanding loans as of September 2025. Within the RMG sector specifically, the NPL ratio is 26%. In textiles, 25%. One in four taka lent to these industries is already in default.
That means factories cannot borrow to bridge the energy disruption. Banks will not extend new credit to a sector where a quarter of existing loans are non-performing. The normal playbook — draw on credit lines to survive a temporary shock, then repay when conditions normalize — is unavailable.
This is the double bind that the March 9 selloff priced in. Factories need capital to survive reduced capacity. Banks will not lend to factories with deteriorating balance sheets. Without credit, factories cut production further. Further cuts worsen the balance sheets. The loop tightens.
Nearly half of Bangladesh’s textile manufacturers face closure if the energy crisis persists. That statistic is not a forecast. It is a description of what happens when factories running at 40–50% capacity cannot access working capital.
What Sustained Pressure Means for Sector Valuations
The market is making a binary bet. Either the energy supply disruption resolves quickly — Qatar lifts force majeure, Hormuz tensions de-escalate, gas pressure returns to industrial feeders — or it does not.
If it resolves within weeks, textile stocks are trading at distressed levels with significant upside. Factories restart, export orders resume, and the 88% illiquidity unwinds as buyers return. The NPL overhang remains, but survivable with restored cash flows.
If it does not resolve, the current floor prices are not floors. They are waypoints. Factories operating at half capacity with 25% NPL ratios and no access to new credit do not stabilize. They deteriorate. The geopolitical risk premium on Bangladesh’s LNG supply chain is not a one-day event — it is a structural repricing of the country’s energy security.
On March 9, the DSE textile sector stopped trading in any meaningful sense. Whether it resumes depends on a gas pipeline in Qatar, a shipping lane in the Persian Gulf, and a banking system that has already written off a quarter of its textile exposure. None of those variables are within the sector’s control.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Consult a BSEC-licensed adviser before making investment decisions.