The benchmark index of the Dhaka Stock Exchange (DSE) surged past the 5,900-point threshold for the first time in nearly two years, extending a three-week rally driven by investor enthusiasm over regulatory reforms and capital market-friendly fiscal policies. 

Closing the week at 5,900.35, the benchmark DSEX index climbed 96 points, or 1.66 per cent. The market remained active across all five trading sessions, with the first four ending in positive territory before a marginal correction in the final session due to routine profit-taking.

Market analysts attribute the sustained upward momentum to a confluence of supportive fiscal measures and a series of reforms by the securities regulator. These initiatives have improved investor sentiment and encouraged greater participation in equities despite lingering global headwinds.

"The market-friendly fiscal measures and the new commission's reform initiatives outweighed concerns over the possibility of renewed geopolitical tensions in the Middle East," said a leading stockbroker.

He added that expectations over proposed changes to margin loan regulations, along with measures to improve market liquidity through faster trade settlement and the approval of scrip netting, further boosted investor confidence.

The market opened the week on a strong note, supported by broad-based buying amid optimism over the reform agenda. Although some investors booked profits in the final trading session, sustained buying interest helped maintain the market's overall upward momentum.

According to EBL Securities, the benchmark index extended its rally on sustained investor confidence in ongoing market development initiatives and an improving near-term outlook.

The stockbroker said expectations of more investor-friendly margin rules, faster trade settlement and the introduction of scrip netting further boosted sentiment, enabling the benchmark index to reclaim the 5,900-point level.

Investor confidence has strengthened markedly since renowned chartered accountant Masud Khan assumed office as chairman of the Bangladesh Securities and Exchange Commission (BSEC) in early June.

Since then, the regulator has introduced a series of market-friendly initiatives, including lifting floor prices from the remaining two stocks, restoring stock exchanges' authority to determine circuit breakers and strengthening market surveillance.

This week, the BSEC approved the introduction of intra-day trading at the country's stock exchanges in a landmark reform aimed at boosting liquidity, improving price discovery and aligning Bangladesh's trading framework with international standards.

The commission also approved draft amendments to the Margin Rules, 2025 for public opinion to make margin lending more investor-friendly.

In another major reform initiative, the regulator launched a comprehensive overhaul of the country's initial public offering (IPO) regime to simplify the listing process, broaden direct listing opportunities and attract fundamentally strong companies to the capital market.

Market participants said these reforms have raised expectations that the market is moving towards greater transparency, efficiency and institutional credibility.

Investor sentiment also received a boost from several capital market-friendly measures incorporated into the approved Finance Bill 2026.

These include a lower tax on dividend income, the removal of the investment ceiling for claiming tax rebates on investments in mutual funds and the continuation of tax exemptions on income from zero-coupon bonds for individual investors.

This week, the blue-chip DS30 Index also surged 50 points to 2,227, while the Shariah-based DSES Index gained 18 points to 1,207.

Large-cap stocks led the rally, with BRAC Bank, LafargeHolcim Bangladesh, Square Pharmaceuticals, Islami Bank and Pubali Bank together contributing about 42 points to the benchmark index's gain.

Market participation remained strong, with total turnover on the DSE reaching Tk 73.7 billion during the week, compared with Tk 69.2 billion in the week before.

Accordingly, average daily turnover stood at Tk 14.75 billion, up 6.5 per cent from Tk 13.83 billion a week earlier.

The general insurance sector accounted for the highest share of turnover at 13.3 per cent, followed by textile (13 per cent) and pharmaceuticals (10.6 per cent).

Market breadth remained positive, with 216 issues advancing, 155 declining and 18 remaining unchanged, reflecting broad-based buying interest.

Almost all major sectors posted gains. The cement sector led the rally with a 7.1 per cent increase, followed by banking, engineering, food, pharmaceuticals and telecommunications.

Lovello Ice Cream was the week's most-traded stock, with shares worth Tk 2.23 billion changing hands. It was followed by Malek Spinning, Bangladesh Shipping Corporation, BRAC Bank and LafargeHolcim Bangladesh.

The Chittagong Stock Exchange (CSE) also ended the week in positive territory. Its All Share Price Index (CASPI) rose 299 points to 15,814, while the Selective Categories Index (CSCX) gained 207 points to close at 9,700.

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