Trading value falls to Nu 15.43M from Nu 38.98M in August as share volume declines by nearly 67 percent
Trading activity on the Royal Securities Exchange of Bhutan (RSEB) slowed significantly in September, with total transaction value falling by more than 60 percent from the previous month, following a strong increase in trading activity recorded in August.
Total trading value declined from Nu 38.98 million in August to Nu 15.43 million in September, representing a fall of about Nu 23.55 million or 60.4 percent.
Share volume also dropped sharply, from 1,206,115 shares in August to 401,158 shares in September, a decline of 804,957 shares or 66.7 percent.
The decline in turnover and volume was accompanied by more moderate reductions in the number of trades and active users, driven more by the size of transactions and volume traded than by a complete withdrawal of investors from the market.
The number of executed trades fell from 1,807 in August to 1,602 in September, down by 205 trades or 11.3 percent. The number of users also declined from 464 to 442, representing a decrease of 22 users or 4.7 percent.
The number of securities traded fell marginally from 17 in August to 16 in September, a decline of one security or 5.9 percent.
Sharp reversal from August
The September performance marks a significant reversal from August, when RSEB recorded strong growth in both trading volume and value compared with July.
In August, the exchange recorded 1.21 million shares traded, up 33.6 percent from 902,661 shares in July. Transaction value rose from Nu 29.62 million to Nu 38.98 million, an increase of 31.6 percent.
However, the August increase was accompanied by a decline in both trades and users. Executed trades fell by 24.3 percent from July, while users declined by 14.9 percent.
September continued the trend of lower transaction frequency and participation, but unlike August, the decline extended to the overall volume and value of securities traded.
The average transaction value also fell considerably. Based on the reported total turnover and number of executed trades, the average value per trade declined from approximately Nu 21,573 in August to Nu 9,630 in September, representing a decline of about 55 percent in average transaction value per executed trade.
Investor participation declines modestly
Despite the sharp fall in turnover, the number of active users declined only modestly. RSEB recorded 442 users in September, compared with 464 in August. The 4.7 percent decline was significantly smaller than the 60.4 percent fall in total transaction value.
The number of executed trades also declined by only 11.3 percent, further distinguishing the fall in turnover from the decline in participation. September recorded 1,602 trades, compared with 1,807 in August. While the number of transactions fell, the reduction was considerably smaller than the decline in shares traded.
Market breadth remains relatively stable
The number of securities traded remained relatively stable, declining from 17 in August to 16 in September. Although one fewer security was traded, the relatively small change suggests that the decline in overall market activity was not primarily due to a substantial narrowing of the range of securities attracting transactions.
Instead, the much larger declines in total volume and turnover indicate lower activity in the securities that were traded during the month.
RSEB’s September market reported a total trading volume of 401,158 and transaction value of Nu 15,426,948.69 across 16 securities.
The September figures also show 277,981 shares on the buy side, involving Nu 11.29 million, while the reported sell-side figure was 212,609 shares, valued at Nu 8.66 million.
Overall, RSEB’s September turnover was 60.4 percent lower than August, while share volume fell 66.7 percent, trades declined 11.3 percent and users fell 4.7 percent. September was a substantially quieter month in terms of the value and volume of securities changing hands, even though the exchange continued to see participation from hundreds of investors and trading across 16 securities.
Tashi Namgyal, Thimphu
