The daily trade turnover on the Dhaka Stock Exchange (DSE) tumbled to a fresh 13-year low on Sunday, as the growing pandemic fear and the floor price system kept the investors on the sidelines.

The daily turnover, a crucial indicator of the market, amounted to only Tk 386 million on the premier bourse, down by 45 per cent from the previous day’s transactions of Tk 696 million.

This marked another lowest single-day turnover since April 2007, when the transactions totalled Tk 376 million. For the first time in 13 years, the DSE daily turnover plunged to Tk 430 million on June 04, 2020.

Daily turnover on the DSE has been below Tk 1.0 billion-mark for the past nine consecutive sessions amid worsening virus outbreak situation, floor price mechanism, and the investors’ disappointment over the proposed budget.

The trading hours have been reduced by one hour now from regular four hours due to the ongoing Covid-19 pandemic.

Market operators said the proposed budget failed to meet the investors’ expectations, while growing tension over virus outbreak and floor price mechanism kept them reluctant to put fresh funds in stocks.

“The worsening pandemic situation has made the market almost buyer-less, as the Covid-19 outbreak is going to put a long-lasting impact on the country’s overall economy,” said a merchant banker, requesting anonymity.

He noted that the proposed budget also ignored interest of the capital market despite the fact that the investors’ confidence is shattered by the virus outbreak.

“The market remained standstill, as the pandemic situation is not improving, and there is no positive signal for the capital market investors in the proposed budget.”

He noted that the institutional investors are in hands-off position, as they are facing liquidity crunch. The retail investors hold on to hard cash amid the economic uncertainty, caused by the virus outbreak.

The depressed market situation, liquidity crunch, and lack of institutional participation altogether eroded the investors’ confidence, which, in turn, had a dampening effect on the market, said a leading broker.

He opined that participation of the investors plunged, as they are in an uncertain position due to the ongoing Covid-19 crisis, and hence adopted a wait-and-see policy.

On March 19, the stock market regulator set the floor price for all stocks on the basis of their average prices over the last five days, so as to stop the market fall amid the pandemic.

But the floor price has had a negative impact, as the investors cannot sell their shares even at a lower price, and many stocks are not traded due to lack of buyers.

Of the issues traded on the DSE floor on Sunday, 214 remained unchanged, only 17 issues advanced, and 14 declined.

However, DSEX, the DSE key index, went up slightly by 2.41 points or 0.06 per cent to settle at 3,962 during the day’s three-hour trading session.

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