Market turnover lowest in 5 months as fixed assets gain popularity

The daily trade turnover on the Dhaka Stock Exchange (DSE) plunged to five-month low on Tuesday as investors were mostly reluctant to make fresh investments in stocks due to the bleak market outlook.

Market analysts said investors were unwilling to inject fresh funds amid a lack of confidence and that cautious investors shied away from taking positions in equities considering the market's waning momentum.

Turnover, a crucial indicator of the market, stood at Tk 2.75 billion on the country's premier bourse on the day, falling further by 9 per cent from the previous day.

It was the lowest single-day transaction since August 4, the day before the fall of the Hasina-led government, when the turnover was recorded at Tk 2.08 billion.

Md Sajedul Islam, managing director of Shyamol Equity Management, said the gloomy macroeconomic outlook weakened investors' confidence while general investors preferred to hold cash to meet high living costs.

The market trend remained bearish for months due to the confidence crisis while the latest policy rate hike by a further 50 basis points to 10 per cent amid a tightened monetary space fueled concerns among stock investors.

The rising interest rates, which made fixed-income instruments more lucrative compared to stock market return, drove away investors from the equity market, said Mr Islam.

Moreover, investors usually keep away from investing in the year-end.

However, Mr Islam added that the low turnover was also a sign of investors' unwillingness in selling shares at the prevailing low price level, which is good for the market.

On Tuesday, the DSEX, the prime index of the Dhaka Stock Exchange (DSE), remained almost flat, with a 1.47-point loss to 5,159. The DSEX lost more than 52 points in the past three trading days.

The blue-chip index DS30, a group of 30 prominent companies, saw a fractional gain of 0.91 points to 1,923 while the DSES index, which represents Shariah-based companies, rose 2.78 points to 1,158.

The price appreciation of Islami Bank, Renata, Eastern Bank, Khan Brothers, and Lovello Ice-cream positively impacted the index while price erosion of Al-Arafah Islami Bank, National Bank, and Beacon Pharma caused the index to close flat.

Investors were mostly active in the pharmaceutical sector, which accounted for 17.3 per cent of the day's total turnover, followed by banking 15.7 per cent and engineering 11.5 per cent.

Losers took a modest lead over gainers. Out of 395 issues traded, 159 closed lower, 150 ended higher and 86 remained unchanged on the DSE trading floor.

Orion Infusion topped the turnover chart, with shares worth Tk 187 million changing hands, closely followed by Robi Axiata, Oimex Electrode, Bangladesh Spinning Corporation, and Lovello Ice-cream.

SK Trims Industries was the day's top gainer, posting a rise of 9.45 per cent, as the company was upgraded to 'B' category from 'Z' category, effective from Tuesday.

HR Textile was the worst loser, plunging by almost 6 per cent as the company reported a record loss of Tk 575 million in FY24 and declared no dividend for the year.

The Chittagong Stock Exchange (CSE) ended down with its All Share Price Index (CASPI) losing 34 points to settle at 14,489 and the Selective Categories Index (CSCX) decreasing 16 points to 8,825.

The bourse saw transactions of Tk 1.39 billion shares, with investors' focus on Square Pharma, which saw a turnover of Tk 660 million; Jamuna Bank with turnover of Tk 475 million, and Wata Chemicals that saw a turnover of Tk 185 million.

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