Dhaka stock turnover hits 13-year low in nervy trade

Bangladesh's stock market has extended its losses as turnover on the country's premier bourse plunged to its lowest level in 13 years as investors remained cautious amid a worsening coronavirus crisis.

The Dhaka Stock Exchange closed with a turnover of Tk 429.7 million, the lowest since April 24, 2007, dropping by 72 percent from Tk 1.52 billion the day before.

The DSEX, the key index of DSE, fell 10 points or 0.25 percent to 3,953.39 points. The main index of the Chattogram Stock Exchange shed 6.39 points to close at 1,1237 with a turnover of Tk 40.59 million.

Mohammad Emran Hassan, CEO of Shanta Asset Management Ltd, pointed to a lack of buyers for the slump in turnover.

"There are plenty of sellers in the stock market but there aren't enough buyers. It could be because buyers don't want to purchase shares for lower prices or they're just reluctant to invest."

"But the share prices are not going drop any lower as the circuit breaker rule is in effect. The implementation of the circuit breakers has also resulted in trading slumps in other share markets around the world.

Circuit breakers are regulatory measures to temporarily halt trading on an exchange to curb panic-selling. The measures were introduced by the Securities and Exchange Commission on Mar 19 to control price swings on both bourses as stocks began tumbling amid growing fears of a coronavirus outbreak in the country.

According to the rules, if prices drop below a five-day average, it will automatically trigger a circuit breaker for an individual stock.

After being closed for two months during the nationwide shutdown over the pandemic, the two main bourses reopened on May 31 with both indices making gains. But it was followed by losses on each of the next four days.