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The daily turnover on Dhaka Stock Exchange tumbled to an eight-month low on Tuesday as investors were reluctant to put fresh bets on stocks amid growing political tensions ahead of the national election.
Also, the latest policy rate hike by a further 50 basis points amid a tightened monetary space fuelled the prevailing concerns among investors regarding the market outlook.
Turnover, a crucial indicator of the market, stood at Tk 2.97 billion on the country’s premier bourse, slumping further by 20 per cent from the previous day’s value of Tk 3.70 billion.
It was the lowest single-day transaction volume since March 28 this year, when the turnover was recorded at Tk 2.72 billion.
Analysts say the prevailing floor price discourages investors, including institutional ones, from putting money in stocks. Uncertain economic outlook may be another reason as to why fresh investments are not coming in.
A lack of institutional buyers coupled with the price restriction is preventing the buy-sell of shares, which is a major reason for low turnover, they said.
Along with low turnover, DSEX, the benchmark index of the prime bourse, went down by 6.62 points to 6,202 - also the lowest in more than seven months.
Investors were reluctant to take fresh positions in equities owing to the rising political tensions in the country.
The market participation continued to sell-off shares across the trading floor since cautious investors preferred to remain on the sidelines owing to the depressed market sentiment, said EBL Securities.
A majority of the traded stocks remained unchanged, as out of the issues traded, 174 remained unchanged while 55 issues advanced and 76 saw price erosions on the DSE trading floor.
The Chittagong Stock Exchange (CSE) ended lower, with the CSE All Share Price Index (CASPI) losing 17 points to settle at 18,405 and the Selective Categories Index (CSCX) shedding 10 points to close at 11,005.