Trading activity on the Royal Securities Exchange of Bhutan (RSEB) increased in value and share volume in August, even as the number of executed trades and participating market users declined from the previous month.
The exchange recorded 1,206,115 shares traded in August, up 33.62 percent from the 902,661 shares traded in July. Total transaction value also increased substantially, rising from Nu 29.62 million in July to Nu 38.98 million in August, an increase of about Nu 9.36 million or 31.60 percent.
However, the stronger turnover did not come with broader participation. The number of executed trades fell from 2,388 in July to 1,807 in August, a decline of 581 trades or 24.33 percent. Market users also decreased from 545 to 464, down by 81 users or 14.86 percent.
The number of securities traded increased marginally, from 16 in July to 17 in August, representing a 6.25 percent increase.
The contrasting movements present a mixed picture of Bhutan’s capital market. August saw substantially more shares changing hands and a higher overall transaction value, but this was accompanied by fewer individual transactions and fewer active users.
The most notable change between the two months was the increase in trading volume. In July, investors traded 902,661 shares, while August saw 1,206,115 shares change hands—a rise of 303,454 shares. The increase in trading volume was accompanied by a broadly similar rise in monetary turnover, with the total value of transactions increasing by 31.60 percent.
This suggests that August generated considerably more market activity in terms of the quantity and value of shares traded than July. However, the simultaneous decline in the number of trades means the increase was not driven by a greater frequency of transactions.
In fact, with 581 fewer trades recorded in August, the average number of shares changing hands per executed trade increased considerably. Based on total reported volume, August averaged roughly 2,156 shares per trade, compared with about 378 shares per trade in July. Average transaction value also increased substantially, from approximately Nu 12,404 per trade in July to Nu 21,573 in August.
The decline in the number of market users is another important feature of the August figures. RSEB recorded 545 users in July, compared with 464 in August. The decline of 81 users represents a fall of nearly 15 percent.
This means that August’s higher turnover was achieved despite a smaller pool of participating users. The 1,807 trades executed during the month also indicate that the market experienced fewer transactions overall than in July.
The July-August comparison therefore highlights an important distinction between market turnover and market participation. A rise in trading value does not necessarily mean that more investors are entering or actively participating in the market.
Instead, the August figures suggest that existing participants may have accounted for a larger proportion of the market’s activity, although the available monthly figures do not identify the investors or individual securities responsible for the increase.
One positive movement was the number of securities traded. The number increased from 16 securities in July to 17 in August. Although the increase was modest, it indicates that trading activity extended across a slightly wider range of listed securities.
A wider range of actively traded securities can contribute to market depth, although the number of securities traded alone does not indicate how evenly trading was distributed among them.
The buy- and sell-side figures also changed considerably between July and August. In July, investors purchased 426,750 shares worth Nu 15.99 million, compared with 144,718 shares worth Nu 5.50 million in August. On the selling side, 448,000 shares worth Nu 15.14 million were recorded in July, compared with 131,347 shares worth about Nu 5.00 million in August. This represents a sharp decline in both reported buy- and sell-side activity.
The August figures should, however, be interpreted carefully. The buy- and sell-side numbers presented in the monthly market highlights should not be treated as evidence of net market buying or selling without transaction-level data, since every completed trade necessarily involves both a buyer and a seller.
The July-August comparison consequently presents a more nuanced picture than the headline increase in turnover might suggest. August recorded 33.62 percent higher share volume and 31.60 percent higher transaction value, but 24.33 percent fewer trades and 14.86 percent fewer users. The number of securities traded increased only marginally.
July itself had already represented a mixed performance, with share volume rising sharply but participation and transaction frequency declining. August continued that pattern, but with an even stronger increase in total trading value and a sharper decline in the number of trades.
The figures underline why market performance cannot be assessed through a single indicator. Trading volume, turnover, transaction frequency, investor participation and the breadth of securities traded need to be considered together.
Tashi Namgyal, Thimphu
