Home ›› 02 Jan 2023 ›› Stock
The country’s capital market started the year on a frail note on Sunday with the single-day turnover again falling to a 30-month low, the second time in a week.
The Turnover of the Dhaka Stock Exchange (DSE), the country’s premier bourse, stood at Tk 178 crore, the lowest in the last 30 months.
The DSE turnover, earlier, fell below this figure on July 7, 2020.
Besides yesterday’s record fall, the prime bourse’s turnover also hit a 30-month low on December 26 last year with a tally of Tk 198 crore.
The liquidity crunch, market analysts say, were becoming alarming on a steady basis as the unsteady banking sector was now hurting the progress of the country’s stock market.
Besides, the overall economic slowdown caused by the Russia-Ukraine war also caused pains for companies, consequently making unstable the market, the opined.
Moreover, the recent regulatory decision to remove the floor price from 168 securities, further weakened investors’ sentiment, letting them stay on the sidelines of the trading floor.
As many as 90 per cent of investors, according to several stockbrokers, went away from the market, in the fear of the losses of their funds, making the market liquidity flow alarmingly poor.
Talking to The Business Post, Sayadur Rahman, president of the Bangladesh Merchant Bankers Association (BMBA), said the DSE turnover might plunge sharply due to two reasons— firstly, the country’s shaky banking sector puts ominous impact on the capital market; secondly, most of the stocks have been stuck at their floor prices for a long span of time, weakening investors’ sentiment.
Investors continued to exit as the majority of the stocks extended their losing streak because the recent regulatory action could not convince them about an optimistic market forecast, analysts commented.
The stock market regulator – the BSEC – had lifted the floor price restriction on 168 scrips, a move designed to give a boost to the ailing market recently.
kazi Ahsan maruf, managing director of Ekush Wealth Management Limited, said alongside the general investors, the institutional investors were also now staying on the sidelines because they all perceived once the floor price is withdrawn, most of the shares would fell further on a massive scale.
“It was an unwise regulatory decision to artificially control share prices by imposing floor prices. Besides, the countrymen have lost confidence in the country’s financial sector, hurting the capital market as well,” he added.
Furthermore, the macroeconomic worries the new year inherited from the last year amidst the global economic slowdown, were also exacerbating investors’ confidence about a buoyant future market forecast, experts opined.
The government’s recent move to slash the country’s GDP growth target for the year 2022 by 1 per cent, further added fuel to investors’ worries about the continuation of the economic hardships for many more days.
The DSEX, the broad index of the Dhaka bourse, dipped 11.44 points or 0.18 per cent to close at 6,195 against 6,207 points in the previous trading session.
Among other indices, the DSES, the Shariah-based index, dropped 3.2 points or 0.23 per cent to settle at 1,355, and the DS30, the blue-chip index, fell 1.6 points or 0.07 per cent to finish the session at 2,193.
The market witnessed a downbeat momentum throughout the trading session as investors continued to offload their holdings, and opted to stay on the sidelines to observe the market trend amidst the prolonged bearish sentiment in the market, said EBL Securities, a stockbroker, in its daily market review.
However, although the majority of stocks witnessed corrections, the 1 per cent lower circuit breaker on particular scrips provided a relief to the ailing market, it said.
The pharma & chemicals sector topped the turnover chart with a contribution of 24.6 per cent to the total turnover, followed by the IT (12.1 per cent) and the engineering (12.1 per cent).
Most of the sectors displayed dismal returns at the prime bourse with the IT sector suffering the most with a loss of 2.2 per cent, followed by services (1.6 per cent) and travel (1.5 per cent).
On the other hand, the ceramic sector posted a marginal gain of 0.2 per cent, followed by banks (0.1 per cent).
Out of the issues traded, 19 securities advanced, 149 stocks declined, and 223 scrips did not see any price movement on the DSE trading floor.
The port city bourse, Chittagong Stock Exchange (CSE), also closed lower with its two major indices – the selected indices (CSCX), and the all-share price index (CASPI), declining by 20 points and 34.3 points respectively.
