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DSE daily turnover hits 20-month low

FE REPORT | December 05, 2022 00:00:00

The daily trade turnover on the Dhaka Stock Exchange (DSE) tumbled to 20-month-low on Sunday as investors were reluctant to put fresh bets on stocks amid persisting economic headwinds and the floor price restriction.

Turnover, a crucial indicator of the market, stood at Tk 3.13 billion on the country's premier bourse, slumping 35 per cent from the previous day.

It happens to be the lowest single-day transaction since April 5 last year, when the turnover totaled Tk 2.36 billion.

The participation of investors was thin as liquidation opportunities had been squeezed for 80 per cent shares being stuck at the floor, said a merchant banker.

The gloomy macroeconomic outlook and the poor financial performance of listed companies have weakened investors' confidence on the trading floor, he said.

General investors prefer to hold cash to meet the higher living costs instead of making any investment. As a result, the money flow to the bank as well as the stock market has shrunk.

The news of a robust export performance coupled with the rise in inward remittance in November also failed to attract investors into the market, he said.

Along with the low turnover, the benchmark index of the DSE went down 20.81 points or 0.33 per cent to settle at 6,224, after gaining 47 points in the past three days.

According to EBL Securities, stocks failed to uphold their upward momentum from the past three days as cautious investors chose to remain on the sidelines amid the ongoing economic adversities and apprehensions about political movements. "The market remained choppy throughout the session since investors opted to protect their funds from the ailing market."

Moreover, most of the stocks being at the floor price have limited liquidation opportunities in the market, making investors reluctant to inject fresh funds into equities, said the stockbroker.

The small-cap IT sector dominated the turnover chart, grabbing 19.80 per cent, closely followed by the pharma sector (14.60 per cent) and life insurance (9.70 per cent).

However, the participation of investors dropped sharply by 67 per cent in the miscellaneous sector, followed by the pharma sector by 41 per cent on Sunday over the previous day.

Investors mostly followed a cautious stance amid a lack of clear direction of the market movement ahead of the election year, said International Leasing Securities.

The panic-driven investors dumped their holdings amid growing tension over macroeconomic cues, said the stockbroker.

Issues from most of the sectors saw notable selling pressure, particularly from paper & printing, travel & leisure, life insurance, and pharma.

Of the 300 issues traded, 64 declined, 22 advanced and 214 remained unchanged on the DSE floor.

Aamra Network became the day's turnover leader with shares worth Tk 181 mllion changing hands, followed by Bashundhara Paper Mills, Genex Infosys, Chartered Life Insurance and Sea Pearl Beach Resort & Spa.

The Chittagong Stock Exchange (CSE) also edged lower, with the CSE All Share Price Index (CASPI) losing 25 points to settle at 18,394 and its Selective Categories Index (CSCX) shedding 15 points to close the week at 11,021.

The port-city bourse traded 2.85 million shares and mutual fund units with turnover value of Tk 61 million.

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