DSE keeps suffering as liquidity crunch, ailing stocks pummel investors

The Dhaka Stock Exchange (DSE), the country’s premier bourse, suffered a massive liquidity crisis this week as investors remained averse to put fresh funds in the ailing market in fear of further losses.

The turnover averaged out at Tk 307 crore this week which was 24.06 per cent lower than the average turnover in the previous week.

More than 70 per cent of the traded scrips were stuck at their floor prices throughout the week, the key reason making investors reluctant to take fresh bets, declining the participation, and consequently the turnover.

Stocks also suffered in the week with the DSEX, the prime index of the DSE, going down by 17.55 points or 0.28 per cent to finish the week at 6227.

The DS30, the blue-chip index, shed 12.55 points to settle at 2,203, and the DSES, the Shariah-based index, fell 8.70 points to close at 1,361.

The pharmaceutical sector topped the turnover chart with a contribution of 19.84 per cent to total turnover at the Dhaka bourse, according to the weekly market report of UCB Stock Brokerage.

The market, according to analysts, was failing to lure new investors, while many of the existing investors were also pulling out their funds, leading to a poorer turnover.

Market insiders said the market observed see-saw trading throughout the week with sellers reigning on the trading floor as the ongoing macroeconomic strains coupled with the fear of political turmoil battered investors’ confidence significantly.

The broad index of the capital bourse slipped into losing territory as investors opted to remain on the sidelines due to a lack of confidence stemming from the worries of a weakening macro-economy, dismal earnings forecasts of listed companies, and looming fears about the resurgence of political movements, said EBL Securities, a stockbroker, in its weekly market review.

On the sectoral fronts, the jute, ceramics and food and allied sectors closed higher this week, while the paper & printing, travel & leisure and life insurance sectors faced corrections.

Investors were engaged primarily in the IT stocks, followed by in pharmaceutical and chemical, and food and allied sectors.

Out of the 399 issues traded, 20 advanced, 75 declined, and 277 remained unchanged on the DSE trading floor this week.