Daily trade turnover on the Dhaka Stock Exchange (DSE) climbed to more than 10 years high on Tuesday, since the country’s stock market had developed bubbles that soon burst in 2010.
Turnover, a crucial indicator of the market, stood at Tk 25.46 billion on the country’s premier bourse, in a further jump by 16 per cent over the previous day’s tally of Tk 21.93 billion.
It happens to be the biggest single-day transaction since December 6, 2010, when the turnover scaled a record amount of Tk 27.10 billion.
However, the all-time-high turnover on the DSE was Tk 32.49 billion, recorded on December 5, 2010, when the market saw a bull run before the ultimate crash. The then key index – DGEN – also peaked at 8,918 on that fateful day.
The DSE trade volume also surged to an all-time high on Tuesday, as a total of 940.90 million shares were traded, snapping the previous day’s record of 741.76 million.
Experts opined that lower returns on the money market, enlistment of some good securities, and proactive regulatory measures are the reasons behind the present bullish trend in the stock market.
However, they advise the investors to learn the necessary skills for trading on the stock market, and then invest in good shares in order to avert any misfortune.
“As the deposit rates are very low in the banks, some investors are diverting their funds from the money market to the equity market,” A B Mirza Azizul Islam, former advisor of the caretaker government, told the FE.
Enlistment of some good securities, like – Robi Axiata and Walton Hi-Tech Industries, is also encouraging the investors to put their funds on stocks, said Mr Islam, also former chairman of the Bangladesh Securities and Exchange Commission (BSEC).
The present stock market regulator took some proactive measures in the past few months, which also boosted the investors’ confidence, he added.
The regulator is continuing its efforts to build a stable and vibrant capital market through listing of some large-cap companies having good fundamentals.
The recent growth in turnover and index – the two most important indicators of the market in general – suggests that the investors’ confidence in the market is back.
Some of the market analysts, including the stock market regulator, predicted that the market, which passed a vibrant year in 2020, would ride higher on the back of promising market fundamentals and increasing participation of institutional investors.
“Continuous growth in turnover pushed the investors’ confidence to a new level, and high trading volume suggested that institutional investors are largely active in the market,” said a leading merchant banker.
The capital market has already got back its rhythm riding on various market supportive measures, taken by the present regulator. Besides, the lower money market returns encouraged the investors to put fresh funds on stocks, he added.
DSEX, the prime index of the premier bourse, however, fell by 42.62 points or 0.75 per cent to settle at 5,609, after gaining 554 points in the past eight consecutive sessions.
As the market has moved to a level that has not been witnessed for many years, many investors have got the chance to sell off the shares they had invested in many years ago, added the merchant banker.