Daily trade turnover on Dhaka Stock Exchange (DSE) slumped to nine months' low on Monday, as investors were reluctant to inject fresh funds into the stock market amid growing political tension.
The daily turnover on the country's prime bourse, one of its crucial indicators, stood at Tk 3.14 billion, plunging by 37 per cent over the previous day's mark of Tk 4.99 billion.
It was the lowest single-day transaction in almost nine months since March 28, when the turnover totalled a record of Tk 2.78 billion.
Market operators said the rising political tension, news of major scams in banks, their provisioning shortfall and soaring non-performing loans coupled with falling foreign portfolio investment eroded the investors' confidence.
According to a recent report of Centre for Policy Dialogue (CPD), scams in 14 banks cost Tk 225 billion in the past decade, which is about four-fifth of the Padma bridge project cost.
The amount of classified loans also reached an all-time high of nearly Tk 1.0 trillion in September ahead of the upcoming national election, the central bank data shows.
Besides, net foreign funds in DSE remained in a negative of Tk 225 million in November, as foreign investors were reluctant to inject fresh finds into the market.
"Many investors were not confident enough to invest fresh funds. The market felt sales pressure from the investors, who were sitting on profit," said a leading broker.
Khairul Bashar Abu Taher Mohammed, chief executive officer of MTB Capital Ltd and secretary general of Bangladesh Merchant Bankers Association (BMBA), said stocks kept falling, as most of the investors preferred a 'wait-and-see' approach ahead of the election.
Mr Bashar further said growing political tension centring the national election coupled with year-end effect has led the investors to sell off their stocks, while institutional investors are sitting idle and observing the market movement carefully.
He noted that a negative psychology has developed in the investors' mind, and many of them have taken a cautious stance, taking the market downward for seven days.
Along with the falling turnover, DSEX - the prime index of DSE, went down by 33 points or 0.62 per cent to settle at nearly one and a half months' low of 5,218.
DSEX suffered a loss of about 143 points or 2.66 per cent in the past seven consecutive sessions.
"The market remained downward throughout the day, reflecting the investors' watchfulness, as political tension weighed on their sentiment," EBL Securities commented in its regular analysis.
The market capitalisation of DSE also shed Tk 61 billion in the past seven trading sessions to reach Tk 3,780 billion on Monday.
Share prices of 68 per cent traded issues declined on the prime bourse, as out of the 339 issues traded, 231 declined, 61 advanced, and 47 issues remained unchanged.
Square Pharmaceuticals topped the DSE turnover chart with 407,809 shares worth Tk 102 million changing hands.
The other turnover leaders were JMI Syringes, United Power, Brac Bank and Anlima Yarn Dyeing.
Sunlife Insurance was the day's best performer, posting a gain of 9.96 per cent, while Jute Spinners was the worst loser, losing 9.88 per cent.
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