The Dhaka Stock Exchange on Wednesday posted the lowest turnover in the past three months due to a low liquidity inflow as institutional investors went for bulk sales of securities.
The daily turnover on the bourse was Tk 1,269.94 crore, down by Tk 287.16 crore from that on Tuesday. The DSE turnover had dropped to Tk 1,131.56 crore on September 14.
The benchmark general index of the DSE shed 148.67 points, or 1.78 per cent, to close at 8,206.17 points on the day. The index had gained 59.41 points from Monday to Tuesday after suffering a 284.48-point plunge on Sunday due to a panic selling.
The Securities and Exchange Commission on Monday raised the margin loan ratio to 1:1 from 1:0.5 to increase inflow of funds into the market that had been suffering from liquidity shortage for two weeks following a string of regulatory measures taken by the SEC and the Bangladesh Bank.
The index lost 547.43 points by midday on December 8. But, the market regained some poise after the capital market watchdog postponed the directives on netting facility and trading with pending cheques.
The liquidity inflow has been comparatively low since December 8 as most of the investors are panicked over the current market situation, said a stockbroker.
Bank, financial institutions, insurance companies, pharmaceuticals and chemicals, and mutual fund suffered a huge fall on the day, he added.
Akter H Sannamat, managing director of the merchant bank Prime Financial Investment, echoed the stockbroker about reduced liquidity inflow.
Investors’ participation also has decreased in the market as the SEC issued most of the directives aiming at the index, instead of stopping manipulation, as it should have, Sannamat said.
Mahmud Osman Imam, who teaches finance at Dhaka University, said banks and non-bank financial institutions were trying hard to increase their cash-reserve ratio in line with a central bank directive. As a result, institutional investors are in for bulk selling to reduce their overinvestment in the capital market, he explained.
Besides, most of the merchant banks have failed to give margin loans to their clients as the call money rate has continued to rise over the past few days, he added.
