Market bleeds: DSEX sheds 483 points since April as turnover hits new low

Infographic: TBS

Stocks on the country's capital market continued to decline amid ongoing political uncertainty, with turnover at the Dhaka Stock Exchange (DSE) dropping to a new low today, matching levels last seen following the fall of the previous government.

Data from the past two months of share trading shows that the benchmark index DSEX has lost around 483 points during the period.

According to the DSE, turnover stood at Tk207 crore on 4 August, a day before the fall of the Sheikh Hasina-led government amid mass student protests demanding her resignation. On 5 August, Sheikh Hasina fled to India.

Today, DSEX fell by 10 points to close at 4,736, while total turnover dropped to Tk235 crore, marking a 15% decline from the previous session, as investor participation remained sluggish.

It was also the lowest turnover recorded so far this year.

Recent DSE data shows that since the market reopened on 6 April after Eid-ul-Fitr vacation, it has remained under intense selling pressure. In the last 35 sessions, the DSEX has declined in 25 and advanced in only 10 till today, resulting in a net drop of 482.75 points. 

During this period, the index lost 755.29 points in down sessions and gained back 272.54 points in the up sessions.

Saiful Islam, president of the DSE Brokers Association (DBA), said the capital market has continued its bearish trend due to various issues, with political uncertainty adding to the problems and keeping investors away from the market.

"The low turnover indicates that investors are not actively participating in trading, and those who are active are mostly selling shares. If investor participation is not regained, the market will not rebound," he said.

When asked about the main reasons behind the continuous downtrend, he noted that a lack of investor confidence is the key factor, rather than a fund shortage.

"Sometimes we see oversubscription in government securities. If there were a fund crunch in the market, how would T-bonds be oversubscribed? The major problem now is a lack of confidence," he added.

Regarding expectations from the upcoming budget, he said, "We have urged the government to include several incentives in the upcoming budget for the sake of the capital market and its investors. We hope the government will announce some packages or incentives for the market."

DSE data on today's trading showed that stocks opened on a positive note, but within just 12 minutes, a wave of share sell-offs gripped the market, dragging the indices down. Throughout the session, stocks continued to fluctuate and eventually ended in the red.

EBL Securities, in its daily market commentary, said the lackluster capital market remained stagnant with the year's lowest turnover as the wavering investor sentiment persistently prompted investors to stay on the sidelines, while declining market indices continued to hit new lows." 

"Investors mostly remained reluctant to take positions in equities amid concerns over the market's momentum as the absence of any major catalyst to restore investor confidence allowed lingering pessimism and uncertainty to persistently dominate the trading board. 

"Apparently, total turnover in DSE fell further by 15.3% to around 10 month-low," the commentary reads. 

On the sectoral front, banking stocks contributed the most to total turnover, exerting 14.4%, followed closely by fuel and power by 14.1%, and textile by 12.6%.

Among the day's top gainers, Energypac Power topped jumping 9.70% to Tk16.9 each, followed by Baraka Patenga by 9.65% to Tk15.9, Baraka Power by 9.43% to Tk11.6, AB Bank First Mutual Fund by 7.31% to Tk4.4, and Mozaffar Hossain Spinning Mills by 7.14% to Tk13.5. 

On the losing end, Information Services Network dropped the most, by 7.51% to Tk40.6. The other losers were Bengal Windsor Thermoplastics by 5.97% to Tk18.9, SK Trims by 5% to Tk9.5, National Tea by 4.77% to Tk161.5 and Apex Tannery by 4.52% to Tk63.3.

The port city bourse, Chittagong Stock Exchange (CSE), also settled in the red zone today. The Selective Categories' Index (CSCX) and All Share Price Index (CASPI) fell by 14.7 points and 26.8 points, respectively.