Liquidity-hit Dhaka stocks' turnover crosses Tk 6bn after more than 4 months

Analysts say the recent improvement in turnover is encouraging, but not enough to declare a sustained recovery

The Dhaka Stock Exchange (DSE) has recorded turnover in excess of Tk 6 billion for the first time in four and a half months, offering a rare spark in a market plagued by a liquidity crisis.

Total transactions stood at Tk 6.01 billion, up from Tk 5.73 billion the previous day.

The index moved in a mixed pattern throughout the day before closing with a gain of 5 points, ending at 4,981, up from Monday’s 4,976 points.

Since October, daily turnover has crossed the Tk 6 billion mark only twice. The most recent was on Feb 25, when it hit Tk 6.07 billion, after Feb 18 trades registered just shy of the mark, at Tk 5.99 on Feb 18.

In the period between, the market failed to generate strong turnover figures as it continued on a prolonged downward trend amid severe liquidity constraints and widespread investor scepticism.

However, a brief rally was seen in early August last year, just after the fall of the Awami League government, when both the index and turnover surged.

On Aug 11, turnover jumped to nearly Tk 20 billion and the benchmark index, DSEX, hit 6,015 points.

A correction followed soon after. Even then, the index hovered above 5,500 for about two months. By October, it dipped below that level, and on Apr 24 this year, the DSEX slipped below 5,000.

Turnover dropped significantly too, falling below Tk 5 billion. At one point in May, the market saw a 149-point plunge in a single day, with turnover sinking to one of its lowest in recent memory.

Although there have been attempts at recovery since then, they have lacked resilience. On Thursday, turnover managed to cross Tk 5 billion again after two and a half months, with the trend continuing into this week.

Notably, the DSEX index had also witnessed record surges even during the ongoing decline. On May 8, it jumped by 99.85 points, and on Jun 6 it rose by 59.65 points -- both standout performances amid an otherwise sluggish market.

According to DSE data, of the 398 companies traded on the day, share prices increased for 158, declined for 191, and remained unchanged for 49.

Following widespread price gains in the previous session, most sectors saw corrections on Tuesday. The largest corrections came in the textile, engineering, and mutual fund sectors.

As on the previous day, the banking, pharmaceuticals & chemicals, and textile sectors led trading by volume. Banks alone accounted for Tk 987.5 million in transactions — the highest among all sectors.

Pharmaceuticals and chemicals followed with Tk 861 million, while the textile sector contributed Tk 673 million.

Based on closing prices, the day’s top gainers were Tamijuddin Textile Mills, Rahima Food, and First Security Islami Bank.

Meanwhile, the worst performers of the day included Premier Leasing and Finance, BD Welding, and First Janata Bank Mutual Fund.

Market watchers say the recent improvement in turnover is encouraging, but not enough to declare a sustained recovery.

“Unless liquidity improves consistently, these are short-term fluctuations,” said one analyst.