Floor squeezes DSE turnover by 40% in 2023
With the majority of stocks lying dormant at the floor price, thus denying investors trading opportunities, the turnover at the Dhaka Stock Exchange (DSE) contracted by 39.83% in 2023, following a 34% decline in the preceding year.
Average daily turnover in the premier bourse dropped to Tk578 crore in the outgoing year, from Tk960 crore in 2022, according to the annual recap by the DSE.
Investors, stuck at the artificially held stocks prices amid no buy orders, were increasingly depending on the block market transactions that allow off-screen exits at up to 10% lower prices from the floor.
Around 6% of the DSE turnover was in the block market in 2022, which increased to 10% in 2023.
The number of shares or securities units traded daily on average dropped to 11.8 crore in 2023 from over 20 crore in the previous year.
The dull participation of investors was coupled with the lackluster performance of indices while large-cap stocks suffered the maximum selloff as the blue chip index DS30 dropped by 4.6% to 2,093.
However, many small-cap speculative stocks offset the bearish impact to save the broad-based index DSEX and Shariah-based index DSES as they inched up by a few basis points.
According to EBL Securities Research, 114 scrips advanced in 2023, while 130 declined and 148 remained unchanged.
Food, general insurance, pharmaceuticals, life insurance and IT were the sectors that together made half of the annual turnover, while jute, general insurance and cement stocks, on average, generated around 10% return in the year.
Having risen in the previous year, the travel and leisure sector suffered the biggest 25% decline in market capitalisation, while IT, paper, ceramic inched down in 2023.
Sea Pearl Beach Resort, Bangladesh Shipping Corporation, Genex Infosys, Gemini Sea Food, Rupali Life, Eastern Housing, Intraco, Orion Infusion and Aamra Network were the most traded stocks of the year.
Stock investors and analysts over the years were expressing their frustration on the regulatory factor of floor price that did not let stock prices fall in line with the deteriorated fundamentals brought by the Ukraine war that began in February 2022.
The Bangladesh Securities and Exchange Commission, at the end of July 2022, imposed the floor price citing small investors' capital protection.
When most of the Bangladeshi stocks were hovering around the floor prices, allowing both rises and falls freely, India, Pakistan, and Sri Lanka saw their major indices closing higher at the end of 2023.
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