Buyers outnumber sellers by far
The daily turnover of Dhaka Stock Exchange on Tuesday plunged to a 25-month low of Tk 206.41 crore due to thin trading at most of the brokerage houses as there was almost no seller of most of the issues.
Officials of a number of brokerage houses said the prices of almost 90 per cent scrip traded on the day touched the circuit-breaker as the unusually low number of sellers pushed up their prices.
They said, as the panic among the investors had subsided for the time being following the recent government measures to boost the capital market, most of them were unwilling to sell their stocks as they were still in heavy losses after the heavy, relentless price plunge in the last two weeks.
The bourse’s daily turnover, which had peaked to Tk 3,200 crore on December 5 and hovered around Tk 1,000 crore in the recent past, nosedived to Tk 206.41 crore on the day. The amount is the lowest since the DSE’s turnover slumped to Tk 204.31 crore on December 22, 2008, if the Tk 68-crore turnover of the bourse made in just five minutes of trading on Thursday is not taken into consideration. That day trading on the DSE was halted merely five minutes after its start because of a sheer plunge in share prices.
Almost 200 of the 248 issues traded on Tuesday touched the circuit-breaker as the stock exchange recorded only 29,281 transactions with the total trade volume standing at 1,88,09,573.
Most of the brokerage houses at Motijheel looked almost deserted within two hours after the opening of trade at 11:00am as many of the investors left the houses realising that they would not be able to buy shares on the day.
‘I am leaving now as I don’t have any thing to sell. Because, the prices of all the shares in my stock are still much lower than their purchase prices. I wanted to buy some shares of a bank to offset some of my losses but the queue of buyers is too long,’ said Zahir Ahmed, a physician who also trades in shares as a sideline, at a brokerage house at 2:00pm.
He wanted to buy shares of a bank while a large number of investors were also eager to purchase around 15 lakh shares of the same bank, but no sellers. At the day’s closing, only 41,750 shares of the company were traded against purchase orders made for 19.20 lakh.
At brokerages like Arena, BRAC-EPL, Shakil Rizvi Stock Ltd, and Times Securities, officials and a few investors were found chatting with each other, with no other activities going on at around 2:30pm.
An official of a brokerage house told New Age that the bourse authorities directed them not to go for aggressive selling. ‘We received instructions to go slow in sales. If any investor, for instance, want to sell 500 shares, we are directed to sell 50 or 100 shares at a time, if the market lot of the issue is made of 50 or 100 shares,’ he said.
Officials of different brokerage houses said investors turned up at the bourse in large numbers during the early trading hours mainly to observe and assess the market situation when trading resumed after the two-day suspension following two volatile weeks.
‘Although the prices of most of the issues touched the circuit-breaker on the day, investors are yet to recover the losses incurred in the five minutes of trading on Thursday when the market slumped by 600 points,’ one of them said.
The Securities and Exchange Commission on Tuesday restructured the circuit-breaker on share prices by halving the breaking limit to put an end to heavy fluctuations in share prices.
On the day’s turnover falling to a 25-month low, DSE president Shakil Rizvi said it was due to a lack of sellers. ‘Investors who are in losses did not want to sell shares as they became confident about the market situation. That’s why the turnover was low.’
He however said the turnover and transactions might increase today.
Professor Salahuddin Ahmed of the Dhaka University finance department said it was unusual that the prices of almost all shares increased on the day.
He also observed that some weaker issues had also gained along with the fundamentally strong companies.
Many of the investors had lost more or less 50 per cent of their capital in the last two weeks of volatile trading that forced the regulators to halt trading time and again and triggered clashes between the investors and the police.
Tuesday’s upswing followed the government’s announcement on Sunday of a number of measures, including the assurance that the merchant banks would reinvest in the capital market the profits they had pocketed, aimed at restoring investors’ confidence in the wake of angry street protests against the steep, unrelenting market falls.
