Indian textile makers’ shares surged on bets they stand to gain from a political turmoil in Bangladesh that threatens to disrupt supply chains.
Bangladesh’s textile exporters face the risk of losing business amid political instability that saw violent protests forcing Prime Minister Sheikh Hasina to flee the country on 5 August.
The stocks of Indian manufacturers including KPR Mill, Arvind Ltd., Gokaldas Exports Ltd., Vardhman Textiles Ltd., and Welspun Living Ltd. all jumped more than 10% in Mumbai, on expectations of a higher market share.
Bangladesh has enjoyed rapid growth in its exports of ready-made garments and other textile products, making it the second-largest exporter of such products in the world behind only China. The country’s textile exports were worth $45 billion in 2022, more than double that of India.
“If there are frequent disruptions to the supply chains in Bangladesh then global buyers may look at alternatives,” said Prerna Jhunjhunwala, an analyst at Elara Securities Ltd. “Indian players are well poised to take market share in that case as they have vertically integrated capacity to service the needs of global companies.”
Bangladesh’s military has promised to install a new interim government in the country after Hasina, one of Asia’s longest-serving leaders, resigned and fled the country amid protests that left scores of people dead.
Source: https://ww.fashionnetwork.com/