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Inactive investors, illiquid assets take DSE turnover to 3-week low

Stocks extend losing spell for 2nd day

FE REPORT | March 21, 2023 00:00:00

The daily turnover on the Dhaka Stock Exchange (DSE) plunged to three-week low on Monday as majority stocks remained stuck at floor prices.

Market experts said low confidence in the market amid a persisting dismal market trend coupled with liquidity crisis and a lack of market triggers kept investors mostly inactive.

Turnover, a crucial indicator of the market, stood at Tk 3.45 billion on the country's premier bourse, falling 24 per cent over the previous day's mark.

It was the lowest single-day transaction since February 27 this year, when the turnover was recorded at Tk 2.62 billion.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), also went down 3.15 points or 0.05 per cent to settle at 6,204.

The participation of investors remained thin as liquidation opportunities had been squeezed for 75 per cent shares due to the price restriction.

Investors have long been hooked to selective stocks while strong fundamental shares have been languishing at floor prices, which, experts say, is a major barrier to bringing stability to the market.

The market index tends to rise for one day, only to fall for the next two days. This has been the case since the regulator imposed floor price.

The large-cap stocks which dominated the market turnover chart earlier, remained stuck at floor prices, making investors reluctant to inject fresh funds into equities, said a merchant banker.

He noted that the gloomy macroeconomic outlook weakened investors' confidence while general investors prefer holding cash over investing in stocks as Ramadan approaches.

Sellers maintained their dominance in the market owing to profit-booking tendency in the absence of a clear market direction, said EBL Securities.

"Investors are being watchful and shifting their focus towards short-term trading and quick gain opportunities instead of taking long-term positions in equities," said the stockbroker.

Investors mostly focused on the pharmaceuticals sector, which captured 23 per cent of the day's total turnover, followed by IT 13 per cent and life insurance 12 per cent.

Most of the traded issues remained stuck at floor prices. Of the 320 issues traded, 51 advanced, 35 declined and 234 issues remained unchanged on the DSE.

Large-cap sectors posted mixed performance. Power booked the highest gain of 0.14 per cent, followed by banking 0.08 per cent and food & allied 0.04 per cent.

Pharmaceuticals saw the highest loss of 0.18 per cent, followed by engineering 0.08 per cent.

Sea Pearl Beach Resort and Spa became the turnover leader, with shares of Tk 150 million changing hands, followed by Rupali Life Insurance, Shinepukur Ceramics, and Telecom and Olympic Industries.

Chartered Life Insurance was the day's top gainer, gaining 3.12 per cent while Al-Haj Textile the worst loser, shedding 10 per cent.

However, the Chittagong Stock Exchange (CSE) inched up, with the CSE All Share Price Index (CASPI) witnessing a fractional gain of 0.96 point to settle at 18,324 and its Selective Categories Index (CSCX) gaining 0.71 point to close at 10,985.

The port-city bourse traded 1.90 million shares and mutual fund units with turnover value of Tk 83 million.

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