Turnover on the Dhaka Stock Exchange nosedived to its lowest level in more than one and a half years yesterday as political uncertainty kept investors at bay.
The turnover dipped 24.48 percent to Tk 300 crore, the lowest since July 11, 2016 when it stood at Tk 272.75 crore, according to the DSE.
However, the premier bourse ended higher yesterday. The prime index, DSEX, saw huge fluctuation throughout the session before settling at 5,965.62 points, up 29.27 points, or 0.49 percent.
Investors' presence at brokerage houses was very thin because of the security concern causing the turnover to fall sharply.
A major group of investors adopted a cautious approach as it was apprehended that the verdict in a graft case against BNP Chairperson Khaleda Zia on the day could spark instability on the country's political front.
The turnover settled at the 19-month low, driven by factors such as political wariness and the prevailing liquidity crisis, said EBL Securities in its market analysis.
The premier bourse has been on a downward trajectory for the last one week over two issues: the latest monetary policy announced by the central bank and the verdict of the Zia Orphanage Trust corruption case.
The index started to descend after the Bangladesh Bank slashed the advance deposit ratio to curb the credit flow of private commercial banks on January 30.
On February 4, the broad index lost 133.15 points, the highest single-day fall in more than four years.
The BB revised down the loan ratio by 1.5 percentage points to 83.5 percent for conventional banks and by 1 percentage point to 89 percent for Shariah-based banks. Banks were asked to adjust to the new ceiling by June this year.
The move prompted the Dhaka Stock Exchange Brokers Association (DBA) to request the central bank to keep the directive suspended for a temporary period in order to stop a panic sale.
The cut in the loan-ratio will compel banks to collect interest at higher rates which will create a liquidity crisis in the stockmarket, said Mostaque Ahmed Sadeque, president of the DBA.
Stocks from banks, telecommunications, pharmaceuticals, and chemicals sectors faced huge buying pressure.
On the DSE, 185 securities gained, 90 declined and 60 remained unchanged. The DS30 and the DSES indexes were up 9.35 and 5.37 points respectively.
The port city bourse, the Chittagong Stock Exchange, also closed in the black. The CSCX and CASPI indexes rose 45.88 and 80.22 points respectively.