The downward spiral of the stock market dragged down Monday's turnover of the Dhaka Stock Exchange (DSE) to Tk352 crore – the second lowest in 2022 – from Tk423 crore in the previous trading session.
Earlier on 19 July, the DSE turnover stood at Tk319 crore, which was the lowest in the year.
On 24 October, the turnover hit Tk335 crore due to a technical glitch that slashed its 260-minute trading session to 108 minutes.
Stockbrokers, however, believe yesterday's trading participation was the year's lowest in terms of the uninterrupted trading session. They have figured out two factors behind the drastic fall in turnover – the regulator-set floor prices which are allowing bare trades in 79% of the listed scrips, and the ongoing sharp fall in the remaining stock prices that rallied from the floor in the last three and half months.
DSEX, the broad-based index of the DSE, fell by 0.39% to 6,190.9 leaving frustration for the investors who were expecting a turnaround from the recently low of 6,200 points.
"Sell-offs continued across the bourse since investors focused on protecting their funds from the ailing market, causing the core index to fall below the 6,200-mark after three months," wrote EBL Securities in their daily market commentary.
Each of the top ten losers – Aamra Network, Genex Infosys, Intraco Refuelling, Monospool, Bashundhara Paper Mill, Paper Processing, Aamra Technologies, Eastern Housing, Sonali Aansh, and ADN Telecom – had been in stunning rallies following the imposition of the floor price at the end of July and now they are facing the sharp correction.
Trend-chasing investors who are holding the stocks are suffering capital erosion almost every day in the recent leg of the market downturn.
Investors decided to remain on the sidelines as their willingness to take long-term positions in equities has been weakened due to dismal corporate earnings declarations from a majority of companies, observed EBL Securities analysts.
Moreover, most of the scrips being stuck at the floor price are squeezing the liquidation opportunities for the investors, making them reluctant to inject fresh funds into stocks, they added explaining why falling stocks are not attracting bargain hunters nowadays.
Furthermore, the around 20% hike in the bulk electricity price has also spiralled investors' concerns as they apprehend a sluggish economic output as well as a bleak outlook for the capital market.
IT, pharmaceutical and chemicals and life insurance contributed to over half of the DSE turnover.
Only tannery and textile sectors averted shrink in their respective market capitalization as very few of the sectoral stocks advanced while the rest were stuck on the floor price.
Meanwhile, paper and printing, IT, and jute sectors led the decline with 5%-7% contraction in their respective market capitalisation on Monday.
Only 13 scrips in the DSE advanced, 72 declined and prices of the remaining were unchanged.
The Chittagong Stock Exchange, on the other hand, registered a 38% increase in its daily turnover to Tk13.1 crore on Monday, while its broad-based index CSCX declined 0.34% to 11,014.
BSEC sits with top-tier stockbrokers
Meanwhile, the Bangladesh Securities and Exchange Commission (BSEC) Chairman professor Shibli Rubayat-Ul-Islam on Monday held a meeting with representatives of the top-tier stockbrokers to discuss the market situation.
"It was part of BSEC's regular dialogue with the stakeholders," the BSEC chairman, after the meeting, told The Business Standard.
Alongside some prevailing issues hindering the capital market's development, the recent gloomy market situation was also discussed in the meeting, he added.
Removal of floor price protection was still far from the regulator's plan, Shibli Rubayat-Ul-Islam said.
Talking to TBS, several participants said they stressed the need for reducing dividend tax that discourages long-term stock investments, and the central bank policy that narrows down the scope for broker-dealers and merchant banks' to borrow funds.