The year 2024 witnessed a lacklustre performance of the stock market as the benchmark index faced erosion, average daily turnover showcased no significant rise while no notable company entered the market.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dropped 16 percent in the last one year. It had almost flatlined in 2023 due to the imposition of floor prices.

At the same time, DS30, the blue-chip index, dropped 7 percent.

In 2022, the Bangladesh Securities and Exchange Commission (BSEC) set floor prices, which is the lowest price at which a stock can be traded, for every share to halt the freefall of the market indices.

This was amid uncertainties brought on by the lingering fallout of the coronavirus pandemic and the Russia-Ukraine war.

After changes came about in key positions of the BSEC following the ouster of former prime minister Sheikh Hasina, the floor price mechanism was lifted.

This is when the market started to undergo adjustments in tune with the reality instead of being propped up artificially.

Apart from the index, average daily turnover of the DSE, which is the total value of shares traded in a day, also remained low, rising 5 percent to Tk 632 crore in 2024.

Usually, stock investors get to make a little money from initial public offerings (IPO). But there were only four IPOs in the last one year whereas there were three in 2023, which was the lowest in around two decades.

Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), termed it a "very frustrating year".

The floor price was in place in the first quarter, meaning in the first three months of the year, which worked against the market and investors, he said.

Then, a highly controversial national parliamentary election was held, so the stock market did not get any benefit from the election, he added.

"After the uprising, the market gained a bit of a momentum but unfortunately, that could not be sustained due to a lack of confidence," Islam said.

If the interim government wants investors to regain confidence, it needs to ensure transparency and accountability and continuously bring in companies with good performance records.

"This is the main problem of the stock market, that it does not have enough investible equity."

Investors will not regain their confidence if they only witness some reforms brought to policies. Rather, good companies can give them the assurance of an upbeat market, Islam said.

The government's activities should be such that it brings about a change in peoples' perception towards the capital market, he added.

In 2024, daily average turnover in the SME market almost doubled to Tk 15 crore. In the same year, turnover in the alternative trading board also rose as peoples' demand for treasury bonds increased.

Turnover registered specifically through trading over mobile phones also increased, although the number of registered users in the associated mobile app dropped by around 7 percent to 30,433.

With the fall of the market, the market's price-earnings ratio, which measures current share prices relative to its per-share earnings, stood at 9.50 percent whereas in the previous year it was 13.12 percent.

This indicates that the market is now lucrative enough to invest in good stocks.