Stocks return to green amid investor optimism

The equity benchmark index returned to the green this week as investors chased beaten-down shares as well as fundamentally strong stocks in the ongoing earnings season amid expectations of lower policy rates.

According to analysts, expectations of a potential decline in policy rates have helped boost investor confidence, sparking renewed interest in stocks for higher returns, leading to positive momentum in the market.

The investor optimism pushed the key DSEX index of the Dhaka Stock Exchange (DSE) above the 5,200 mark on Tuesday for the first time in three weeks, but the last two trading sessions saw some gains eroded due to selling pressure.

The DSEX finally settled the week 32.6 points or 0.64 per cent higher at 5,167. This follows a decline of 60.5 points in the previous week. The rebound marks a modest recovery after last week's losses.

The blue-chip DS30 index, a group of 30 prominent companies, also rose 19 points to 1,913 and the DSES index, which represents Shariah-based companies, edged up 11 points to close at 1,162.

Several sector-specific stocks, including BRAC Bank, Kohinoor Chemicals, Square Pharmaceuticals, Beximco Pharmaceuticals, and ADN Telecom, helped propel the market this week. These five stocks contributed 17.2 points to the rise of the DSEX index.

Some of the key financial indicators, such as remittance and exports, have increased while yield rates of government securities have fallen, boosting investor confidence in the equity market.

In its weekly market review, EBL Securities said the benchmark index of the capital bourse rebounded into positive territory, driven by bargain hunters who anticipated short-term gains and selectively invested in promising stocks based on their expected earnings for the recently concluded quarter.

Additionally, the recent decline in 10-year government bond yields also instills growing investor optimism, it added.

Turnover, a crucial indicator of the market, stood at Tk 20.6 billion this week, up from Tk 18.90 billion the previous week.

Consequently, the average daily turnover rose 9.15 per cent to Tk 4.12 billion, up from Tk 3.78 billion the previous week.

Pharmaceutical sector kept its dominance in the turnover list, accounting for 17 per cent of the week's total turnover, followed by textile (13 per cent) and engineering sector (11 per cent).

Most of the traded stocks saw price appreciation, as out of 397 issues traded, 201 stocks gained while 150 ended lower and 46 remained unchanged.

ADN Telecom was the most-traded stock with shares worth Tk 1.83 billion changing hands, followed by Orion Infusion, Khan Brothers PP Woven Bag, Asiatic Laboratories and Midland Bank.

Khulna Printing & Packaging was the week's top gainer, soaring 22.80 per cent while Power Grid Company became the worst loser by shedding 21.5 per cent.

The Chittagong Stock Exchange (CSE) also ended higher, with the CSE All Share Price Index (CASPI) gaining 97.14 points to settle at 14,449 and the Selective Categories Index (CSCX) gaining 69 points to 8797.

The port city's bourse traded 9.22 million shares and mutual fund units, with turnover reaching Tk 215.21 million.

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