The Dhaka bourse witnessed a 15 per cent fall in turnover yesterday because of thin participation of institutional investors.
Turnover, one of the important indicators of the stock market, hit Tk 786 crore yesterday, down from Tk 928 crore on the previous trading day.
“Institutional investors are not pouring money fearing a second wave of the Covid-19 in the upcoming winter season. This will ultimately affect the stock market,” said a merchant banker.
Already, some European countries have announced lockdowns again, which will surely leave a negative impact on the earnings of export-oriented listed companies, he said.
Institutional investors are also looking forward to the country’s biggest-ever initial public offering of Robi, so their concentration of investment in the secondary market is low now, he added.
Robi Axiata, the second-largest mobile phone operator in Bangladesh, would raise Tk 523 crore. Of the amount, Tk 387 crore would be raised from the stock investors and the rest from its employees. The IPO subscription would start on November 17.
“Our institutional investors are not participating in the stock market despite the introduction of various incentives by the central bank,” said Mahmudul Hasan, a stock investor.
The Bangladesh Bank allowed banks to form a fund of Tk 200 crore to invest in the stock market by taking loans from the banking regulator through a repurchase agreement.
Despite the incentive, most of the banks are reluctant to invest into the stock market, he said. “The regulator should talk to them now.”
“The market would not be vibrant in the long run without the active participation of institutional investors,” he added.
The DSEX, the benchmark index of the DSE, shed 18.36 points, or 0.37 per cent to 4,923.65 yesterday.
Beximco Pharmaceuticals was the most traded stock with shares worth Tk 63 crore changing hands, followed by Beximco Ltd, Northern Insurance, Associated Oxygen and Walton Hi-tech Industries.
Of the 356 securities, 110 advanced, 164 declined and 82 remained unchanged.
Associated Oxygen topped the gainers’ list with a 9.96 per cent rise, followed by SEML Lecture Equity Management Fund, SEML IBBL Shariah Fund, CAPM BDBL Mutual Fund one and National Feed Mill.
Global Insurance gave up the most as it lost 8.59 per cent yesterday, followed by Republic Insurance, C&A Textile, Shyampur Sugar and Imam Button.
The port city bourse also fell: it declined 27.42 points, or 0.32 per cent, to 8,509.04. Of the 253 shares, 87 rose, 116 dropped and 50 remained unchanged.