DSE turnover slips to below Tk300cr after 48 days

Infographic: TBS

The turnover at the Dhaka Stock Exchange (DSE) nosedived to a 48-day low, falling to Tk296 crore today. The lowest turnover this year was recorded on 4 August at Tk200 crore.

This marks a sharp decline in trading activity, indicating reduced investor participation and weakened market sentiment, according to market analysts.

Experts attribute the drop to ongoing economic uncertainties, regulatory concerns, and investor caution.

Ashequr Rahman, managing director of Midway Securities, told The Business Standard that economic uncertainty, rising interest rates, and the Bangladesh Securities and Exchange Commission's (BSEC) work processes are the key reasons for the liquidity crunch.

Ashequr stated that the share market in the country has experienced low turnover compared to its market capitalization for the past 10–12 years.

Additionally, the number of market participants is quite limited. As a result, any changes at the policy or government level have a direct impact on the market. In contrast, markets in other countries can absorb significant policy changes due to a larger number of participants, he added.

Furthermore, there has been little visible economic progress or reforms since the change of government. Meanwhile, the World Bank has projected a reduction in the GDP growth rate, reflecting uncertainty about the country's economy. Additionally, investors are uncertain about the actions of the new commission, which has led to decreased market participation, he added.

Moniruzzaman, managing director of Prime Bank Securities, said investors remain in a "wait-and-see" mode, as recovery in the macroeconomic situation is not yet visible.

He added that the yield on Treasury bonds is currently over 12.50%, making them a much more secure investment compared to the stock market. As a result, a significant amount of capital is being allocated to Treasury bonds.

Additionally, the announcement season for company dividends, which typically concludes in June, is underway. However, investors are sceptical about companies' ability to pay substantial dividends this year, leading to a lack of interest even during the dividend season, he further stated.

A senior official from a brokerage firm, speaking on condition of anonymity, said the bank accounts and beneficiary owner (BO) accounts of several large investors in the stock market have been frozen, preventing them from participating in transactions.

Meanwhile, on the same day, the DSEX, the benchmark index of the DSE, dropped by 49 points, closing at 5,316. This decline marks the third consecutive day of losses, further extending the ongoing downward trend in the market.

The blue-chip index DS30 fell by 15 points to close at 1,947. Among the traded stocks, 53 advanced, while 300 declined and 42 remained unchanged.

EBL Securities, in its daily market review, stated that the capital market continues to decline, weighed down by prolonged pessimism and an absence of positive catalysts to boost investor sentiment, leaving the bourse in a state of constant strain for investors.

The market witnessed day-long volatility, with sellers dominating across the trading board, causing the majority of stocks to extend their correction phase, while only a few selective stocks remained resilient throughout the session, the review added.

EBL Securities further commented that market participation remained sluggish as cautious investors preferred to stay on the sidelines and monitor the market's momentum.