DSEX extends gains riding on banking shares

The benchmark index of the Dhaka Stock Exchange (DSE) closed the first week of the New Year high, extending gains for a third straight week.

The market rally is driven by renewed buying interest in heavyweight banking stocks, as investors grew optimistic about the outlook for political stability and macroeconomic recovery.

"Investors are putting fresh bets on fundamentally strong stocks, anticipating improvement in political and macroeconomic conditions after the parliamentary elections scheduled for February 12," said a leading stockbroker.

The market's upward trajectory also aligns with expectations that the newly elected government will adopt favourable fiscal policies to drive economic growth momentum, he said.

"The investors anticipated easing of the market uncertainties, while strong accumulation in large-cap banking stocks added strength to the market's upward trajectory," he added.

In a major political development, Acting BNP Chairman Tarique Rahman returned to Bangladesh December 25 after 17 years in exile. His return, according to analysts, has had a positive impact on the country's political landscape, particularly given that his party is the largest opposition group.

"As the uncertainties surrounding the elections have been cleared along with policy certainty on the regulatory front, the market is expected to attract fresh investment," said the stockbroker.

The stock market has already shown signs of a recovery, with broad-based price appreciation across a wide range of stocks. Opportunistic investors, seeking potential short-term gains, rushed back into the market, providing relief to an otherwise stagnant market sentiment.

This week, the market saw five trading sessions. Of them, three sessions closed higher while two ended lower.

The prime DSEX index finally settled the week 88 points or 1.79 per cent higher at 4,998. The DSEX gained around 167 points in the past three consecutive weeks.

EBL Securities, in its weekly market analysis, said, "Investors selectively repositioned into heavyweight banking stocks amid improving sectoral expectations and perceived clarity on the political front that added strength to the market's upward trajectory."

The blue-chip DS30 index, a group of 30 prominent companies, also surged 46 points to close at 1,915 while the DSES index, which represents Shariah-based companies, rose 5 points to 1,011.

Price surge of selective blue-chip stocks, including Islami Bank, Pubali Bank, Square Pharma, BRAC Bank and Beximco Pharma, largely contributed to the index surge. These five stocks accounted for a 67-point rise in the DSEX.

The market participation also increased as the total turnover stood at Tk 23.73 billion as against Tk 14.17 billion in the week before.

Accordingly, the average daily turnover stood at Tk 4.75 billion, up 34 per cent from Tk 3.54 billion in the week before.

Investors were mostly active in the banking sector, which accounted for 20 per cent of the week's total turnover, followed by textile (14 per cent) and pharma sector (13 per cent).

Of the 389 issues traded, 177 saw prices drop while 176 others ended higher and 36 issues remained unchanged on the DSE floor.

Major sectors showed positive performance. The large-cap banking sector posted the highest gain of 4.8 per cent, followed by non-bank financial institutions, pharma, engineering, telecom and food sectors.

Orion Infusion became the most-traded stocks, with shares worth Tk 1.15 billion changing hands, closely followed by Square Pharma, City Bank, Uttara Bank, and Fine Foods.

The Chittagong Stock Exchange also ended higher, with its All Shares Price Index (CASPI) gaining 302 points to close at 13,994, while the Selective Categories Index (CSCX) rose 211 points to 8,653.

The port city bourse traded 11.70 million shares and mutual fund units with turnover value of Tk 728 million.

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