The stock market is heading into 2023, bearing the burden of domestic financial mismanagement, supply chain disruptions, and economic slowdowns globally.
Unless these macroeconomic worries are addressed and the government designs policies to facilitate corporate earnings, a stable market is unlikely to achieve in the upcoming year, says Ahsan H Mansur, executive director at the Policy Research Institute.
A tensed political environment ahead of the election may exacerbate the volatility facing the stock market.
Except for the pharmaceutical companies, he fears other industries will continue to face stumbling blocks. The demand for medicines will stay strong, if it does not go higher, and so the manufacturers will enjoy a stable growth.
The banking sector faces little prospect of overcoming the gloom and doom that emerged out of scams and financial irregularities. "The banks' profitability will remain depressed in 2023."
The ready-made garment (RMG) sector will be vulnerable to global economic possibilities and changes in consumer behavior. The companies that meet local demands will be affected too if the consumers' spending capacity is squeezed.
Those in the construction sector may find a situation favourable to income growth as the prices of products, such as cement, rod and steel have already been hiked. But a falling demand due to macroeconomic concerns and eroding purchasing capacity may hurt the business.
The energy sector has seen unpaid bills piling up. If the government does not clear the bills, the power and energy sector will see its profit slump.
The government, however, can play a vital role in offsetting some of the factors by taking measures to support business and help the sectors grow.
Most of the stocks have languished at the floor prices throughout 2022, but the mechanism can no longer stay in place as a preventive solution against freefall of the market. If the floor is withdrawn in 2023, many stocks may see major price corrections, but ultimately they will bounce back based on demand and supply.
