The average daily turnover on the Dhaka Stock Exchange (DSE), the country’s prime bourse, surged by 76 per cent to Tk 1,265 crore month-on-month (MoM) in the just concluded February, while a single-day turnover crossed Tk 1,800 crore mark after around 17 months.
Meanwhile, the key index of the Dhaka bourse, DSEX, added 101 points to close at 6,255 points, up from 6,153 points in January.
The market started with heightened optimism and increased market participation across the trading board as optimistic investors perceived lucrative investment opportunities in the market after it went through significant corrections following the removal of floor prices from the majority of scrips, leading stockbroker firm EBL Securities Ltd said in its monthly review.
DSEX, also the benchmark index of DSE, extended its gaining streak for 10 consecutive sessions, with its single-day value soaring to a 16-month high of 6,447 points as optimistic investors continued their chase for the rallying scrips.
However, the momentum failed to sustain for long as the upward market momentum observed a major setback since risk-averse investors opted to realise their short-term gains, being wary of the sustainability of the upbeat vibe in the market.
The dominant sell pressure from cautious investors who preferred to protect their funds from the ailing market and minimise their losses has eroded a significant portion of the gains, with the DSEX extending its losing streak for seven straight sessions and losing around 103 points.
However, indices observed mixed performance in the remaining sessions since investors remained active on both sides of the trading fence, as market participants were wary of the market momentum amid the prevailing volatility and faded investor optimism.
On January 18, after the session's closing bell, the Bangladesh Securities and Exchange Commission (BSEC) issued an order rescinding the floor price for all listed companies and mutual funds, except for 35 companies' shares, complying with a long-standing demand from stakeholders.
On January 21, DSEX fell 96.50 points in the first trading session after the floor price removal. After five minutes of trading, the key index had plunged about 214 points but later recovered most of the initial losses.
The next day, DSEX gained 14.05 points and closed at 6,254.31. The stock market regulator also withdrew the floor price for 23 more companies that day.
Market insiders said the key index was very much expected to fall as a large number of stocks failed to see price discovery for a long time due to the floor price.
They also said that many investors did not get the opportunity to trade due to the prolonged price level. As a result, there was pressure to sell shares at the beginning of the day, but it gradually decreased.
Welcoming the floor withdrawal move, a leading stock broker said the market saw some corrections in the first few days. It was nothing to be afraid of and the market will recover very soon.
On February 6, BSEC withdrew the floor price for another six companies’ shares. The stock market regulator’s order came into effect the next day for Orion Pharmaceuticals, Anwar Galvanizing, and Renata Ltd, and will remain in effect until further notice.
Meanwhile, the remaining three companies – British American Tobacco Bangladesh, Grameenphone and Robi – will have the floor price until their forthcoming record date.
Only six companies now share the floor price. These are Beximco Ltd, BSRM Ltd, Islami Bank, Khulna Power, Meghna Petroleum, and Shahjibazar Power.
On July 28, 2022, BSEC imposed floor prices on all securities to prevent shares from falling beyond a certain level amid domestic and global macroeconomic strains.
