The block board contributed more than 10 per cent to the annual market turnover featured by the Dhaka bourse in 2023, as it offered the scope of offloading shares at lower than floor prices.
The Dhaka Stock Exchange (DSE) posted a turnover of Tk 1,410 billion for 2023, of which 10.05 per cent or Tk 141.77 billion came from transactions executed on the block board.
The contribution of block transactions in the annual market turnover was the highest in 2023 since 2021. It was 6.08 per cent of the DSE turnover in 2022 and 4.03 per cent in 2021.
Due to the price restriction, a majority of the stocks lost buyers in the main market, driving large investors to the block board that allowed trades at prices up to 10 per cent lower than the floor prices set for the main board.
The window of opportunity to buy or sell shares at lower prices on the block board was created by the regulator in June 2020 to boost turnover.
The annual turnover on the Dhaka bourse saw a steep fall of 40 per cent to Tk 1,410 billion in 2023, compared to the year before.
A block trade involves a large volume of shares, executed outside the main board following a negotiation between the buyer and the seller. Each transaction should be worth at least Tk 0.5 million.
The scope created for big investors was criticised by traders and general investors for the disparity that it led to.
The DSE's 2023 turnover would have shrunk further, without the block board transactions.
On many sessions, the block board played a pivotal role in elevating the exchange's turnover.
For example, the DSE experienced a six-month-high turnover on May 24, 2023 at over Tk 11 billion, riding on bulk transactions of some stocks, such as Social Islami Bank, Emerald Oil Industries, Al-Haj Textile, and Islami Bank.
Large volumes of shares of Islami Bank Bangladesh were traded on the DSE's block board in the year.
The DSE's turnover jumped 89 per cent to Tk 6.45 billion on November 15, 2023 from the previous session, owing to transactions of Islami Bank's shares worth Tk 2.56 billion on the block board.
The state-run Investment Corporation of Bangladesh (ICB) offloaded its entire shareholding of the Islami Bank for Tk 1.09 billion.
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