Bank stocks propel market on hopes of post-poll recovery

The Dhaka bourse closed Monday's session with a moderate rise in the broad index, extending the gaining streak for the second consecutive session, mainly driven by the banking sector.

From the very beginning of the day's session, investors' buoyancy was visible through the movement of the broad index and turnover value. DSEX, the broad index of the Dhaka Stock Exchange (DSE), continued its upward trend for more than an hour. Except for the midsession, the index movement was steady, and it finally closed the day with a moderate gain.

At the end of the session, DSEX settled at 5,247 points, up 1.04 per cent or 54.39 points.

The appreciation in banking stocks played a pivotal role in the index's rise. Market operators said banks saw increased participation amid expectations that they would benefit the most from the post-election economic scenario.

Ahsanur Rahman, chief executive officer of BRAC EPL Stock Brokerage, said, "The banks would bag the highest benefits from the recovery of the national economy." He noted that banks had been deprived of the benefits of exports and imports for a long time due to economic slowdowns.

"Many investors think the earnings of the banks will rise if the economy sees any recovery after the national election," Rahman said.

Ongoing reforms in the banking sector also made the stronger banks optimistic about further growth in operating profits. "That's why good banks, including BRAC Bank, have experienced increased participation from local and foreign investors," he added, noting that banks typically lead the market under normal conditions.

BRAC Bank was the top turnover leader on Monday with a value of Tk 298 million, followed by City Bank, Islami Bank Bangladesh, and Pragati Life Insurance. Islami Bank alone added 29 points to the broad index.

Among the top 10 index contributors, six were banks, including BRAC Bank, Al-Arafa Islami Bank, City Bank, Eastern Bank Ltd., and United Commercial Bank.

A market review by EBL Securities said the premier bourse extended its upward trajectory for a second consecutive session, as investors heightened participation and sustained accumulation in banking stocks.

"This improving sentiment translated into broad-based buying interest across key sectors, enabling the index to extend gains through the session and close in positive territory," the review said.

Other blue-chip stocks, including Square Pharmaceuticals and Grameenphone, also supported the rise in the broad index. Of the 30 blue-chip companies, 21 advanced, seven declined, and two remained unchanged.

The DS30 index, comprising blue-chip stocks, advanced 1.03 per cent or 20.59 points to close at 2,017.83 points.

Of the total issues traded on Monday, 215 advanced, 107 declined, and 68 remained unchanged. The premier bourse posted a turnover of Tk 7.46 billion, up 19 per cent from the previous session, with Tk 139 million coming from transactions executed on the block board.

Investors' participation in the banking sectoraccounted for 25.8 per cent of total market turnover, followed by pharmaceuticals, textiles, and general insurance.

Islami Bank Bangladesh was the top gainer with a rise of 9.85 per cent to close at Tk 52.40 per share, while Meghna Pet Industries was the worst performer, declining 7.80 per cent to close at Tk 26 per share.

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