Turnover of the Dhaka Stock Exchange on Sunday crossed the Tk 1,100-crore mark again after two and a half months while the bourse’s general index continued to rise for the fifth consequent day as both individual and institutional investors went on a buying binge on the hope that the market would rally further.
Market operators said the turnover of the bourse rose to Tk 1,139.45 crore on Sunday from Tk 954.84 on the previous trading day as investors’ confidence in the market was on the rise following the government decision to allow undisclosed money to be invested in the equities market.
DGEN, the benchmark general index of the DSE, added 40.28 points, or 0.65 per cent, to close the day at 6,157.51 points.
The bourse’s turnover hit an all-time high of Tk 3,249.57 crore on December 5, when the market witnessed a boom, but plunged to Tk 206.41 crore on January 25 following a series of huge stock crashes that discouraged the investors from trading.
A liquidity crisis also hit the market that time as most of the banks as well as other large investors withdrew their overinvestment in December pocketing huge profits.
After the dull period of January-March, the market began to get back on track in April, when the turnover crossed the Tk 1,000 crore mark for the first time after the market debacle. The turnover of the DSE amounted to Tk 1,224.16 crore on April 11.
But, the market started to slip again as investors became panicked once more following uncertainty over implementation of the recommendations of the probe committee on January’s stocks scam.
As institutional and large investors remained almost inactive, a fresh liquidity crisis seized
the market, with the turnover of the bourse plunging to Tk 296.49 crore on May 26.
Investors, who lost most of their investment in the latest stock market debacle, took to the streets time and again to protest the relentless fall in share prices. They also demanded government action to address the situation.
Several government attempts including the launching of the Tk 5,000 crore open-ended Bangladesh Fund during the period to stabilise the market and ease the liquidity crisis failed.
The market had become upbeat again before the proposed budget for the current fiscal year was tabled in the parliament on the speculation that the government might allow legalisation of undisclosed money for investment in the capital market for easing the liquidity crisis.
But, when the proposed budget was announced on June 9 without any such provision, the market again turned red, shedding 213 points in a week.
The market, however, had been in an uptrend before the passage of the finance bill with the investors anticipating that the government would finally allow investment of undisclosed money in the capital market. The average daily turnover rose to Tk 800.55 crore and the DGEN added 269.97 points in the past week, when the parliament passed the budget with a provision for allowing investment of undisclosed money in the share market by paying a 10 per cent tax.
Market operators said the extension of the deadline for the banks to bring their exposure in the capital market within the limit and reassess their credit-deposit ratio on source fundoffered by the Bangladesh Bank also brought the institutional investors to the trading floor.
Turnover increased significantly on Sunday, the first trading day of the current fiscal year.
Of the 256 issues traded on the day, 204 advanced, 49 declined, and three remained unchanged.
Most of the bank issues lost values as investors went for profit selling of the shares.
Insurance and financial institutions sectors were upbeat on the day, while most of the issues in textile and pharmaceuticals sectors also ended in the positive territory.
Salahuddin Ahmed Khan, a professor of finance at Dhaka University, said, ‘Turnover made a significant rise recently mainly due to over-enthusiasm of the investors about allowing investment of undisclosed money in stocks.’
‘The BB’s move on commercial banks pulled them out of the negative zone but it is difficult to say whether they will able to contribute to the capital market in the current fiscal,’ he said.
‘If the banks do not contribute as before, which they probably will not be able to do, according to the budgetary measures, the positive streak in the market will not sustain for long,’ he argued.
-With New Age input