DSE foreign trade turnover falls 30% in first half of March

Trading activity of foreign investors on the Dhaka Stock Exchange (DSE) declined by 30.32% in the first half of March, according to the Monthly Economic and Capital Market Overview by EBL Securities.

The report shows foreign investors' trade turnover stood at $7 million (Tk85 crore) during the first fifteen days of March, a sharp drop from $10 million (Tk122 crore) in the same period of the previous month.  

The report also noted that foreign trade turnover had reached $22 million (Tk268 crore) in February – 47% higher than January.  

August of last year marked the highest foreign trade turnover in recent years, reaching $68 million. This spike was attributed to foreign investors' optimism surrounding potential reforms under the interim government, which spurred increased market participation, according to market insiders.  

However, that optimism has since waned. "Despite high expectations, no visible steps have been taken to improve the market or rebuild confidence," said a managing director of a brokerage firm, speaking on condition of anonymity.  

"Foreign investors are closely monitoring developments around market reforms and macroeconomic indicators," a market expert added. "They remain interested in the market, but restoring confidence is essential to attract long-term investment."  

Meanwhile, EBL Securities reported that the benchmark DSEX index of the DSE closed 28 points (0.5%) down month-on-month at 5,219 in March. The daily average turnover also dropped by 10%, to Tk410 crore, compared to the previous month.  

The brokerage firm noted that the capital bourse observed subdued momentum amid shortened trading hours during Ramadan, while investors also remained watchful of the market's trend due to prevailing political concerns.  

Moreover, an abrupt regulatory unrest within the Bangladesh Securities and Exchange Commission (BSEC) weighed down on investor sentiment, prompting further selling pressure across the trading board, it added.  

EBL Securities further noted that the momentum soon moderated as the regulatory environment stabilised, briefly restoring investor confidence and driving a partial recovery. Nevertheless, the market failed to sustain this momentum for long, as investors preferred to remain cautious due to the weakened strength of the market's trend.  

Opportunistic investors sought quick gain opportunities in the volatile market, while investor participation also remained evident in particular December-closing scrips as anticipation built around their earnings and dividend declarations, the report noted.  

Looking ahead, trading activity is likely to remain subdued as the market opens after the Eid holidays, with market momentum expected to remain cautious over the earnings announcements from listed companies, according to the report.