Floor price squeezes DSE turnover by 40% in FY23

Turnover in the Dhaka Stock Exchange (DSE) declined by 40% in fiscal 2022-23 as the market was suffocated by the floor price mechanism for 11 of the 12 months.

In FY22, average daily turnover in the premier bourse surged by 25% to Tk1,328 crore, and it dropped to Tk793 crore in the last fiscal year, according to the DSE.

In 241 trading sessions of the last fiscal year, the total turnover dropped to Tk1.91 lakh crore, which means the annual transaction value was one-fourth of the total market capitalisation of Tk7.72 lakh crore in the DSE. In the 240 working days of the previous fiscal year, DSE registered TK3.19 lakh crore in total turnover.

Stockbrokers were not surprised at all, as the market was in the bear's grip for more than two-thirds of the fiscal year, while the floor price imposed at the end of July last year made buying and selling impossible for most of the shares, most of the period.

DSEX, the broad-based index of DSE, was 0.52% down in 2022-23 as it ended the fiscal year at 6,344, while the blue chip index DS30 fell by 4.43%.

Volume, which refers to the number of securities traded over the year, declined by 58% as 14.43 crore shares or other securities units were traded a day on average.

The depressed state of the market, along with the added pain of rare selling opportunities, hurt investors' confidence, and the total number of individual investors dropped over the 12 months through 30 June.

According to the Central Depository Bangladesh Ltd, beneficiary owner accounts in the capital dropped by 1.94 lakh to 18.6 lakh, while the number of individual investors' accounts holding shares dropped by around 80 thousand to less than 14 lakh for the first time in three years.

The average price-to-earnings ratio at the DSE came down by 10 basis points to 14.34 in a year.