Stocks see remarkable gains, riding on optimism over bank reforms

The key index of the Dhaka Stock Exchange (DSE) surged on Monday, riding on optimism surrounding reforms brought on by the central bank.

The DSEX, the benchmark index of the DSE, moved up by 82.09 points to 4,976, the highest gain in two months.

The index last exceeded this level on April 27, when it reached 4,995 points.

The benchmark index of the country's capital market maintained its upward trajectory for a third consecutive session, buoyed by bullish sentiment, especially towards bank stocks, according to EBL securities.

Renewed optimism following recent reform measures by the Bangladesh Bank played a key role in boosting investor confidence, it said.

The DS30 index, which represents blue-chip stocks, gained 36 points to close at 1,873, while the DSES Index, comprising Shariah-compliant companies, rose by more than 15 points to 1,081.

Throughout the session, buyers remained firmly in control, with notable interest in selective large-cap stocks perceived to be trading at attractive valuations.

"The macroeconomic indicators are good. The [foreign exchange] reserves of the country improved by nearly $10 billion and inflation has fallen to a 27-month low.

"Export has increased, whereas most of the shares are undervalued. That's why the stock market is gaining momentum," said Md. Moniruzzaman, managing director & CEO of Prime Bank Securities.

The country's headline inflation rate cooled to 8.48 per cent in June from 9.05 per cent in May, driven by falling prices in both food and non-food categories, according to the latest data of the Bangladesh Bureau of Statistics (BBS).

The buying momentum helped the index cross a two-month high, said EBL securities.

Islami Bank, BRAC Bank, Beximco Pharmaceuticals, The City Bank, and Square Pharmaceuticals collectively contributed more than 20 per cent to the increase in market capitalisation and added 31.1 points to the index.

Turnover, a key gauge of market activity, stood at Tk 5.7 billion on Monday, up 13.3 per cent from the previous session.

Out of the 396 issues traded on the DSE, 278 advanced, 73 declined, and 45 remained unchanged.

BRAC Bank topped the turnover chart, with shares worth Tk 377.77 million changing hands. Other active stocks included City Bank, Midland Bank, Beach Hatchery, and Square Pharmaceuticals.

Sector wise, the banking sector led the turnover chart with a 26.7 per cent share, followed by pharmaceuticals 13.2 per cent and textiles 10.3 per cent.

Most sectors closed in the green, with banks up 3.9 per cent, mutual funds 2.9 per cent, and financial institutions 2.2 per cent.

The Chittagong Stock Exchange (CSE) also closed higher, with the All Share Price Index (CASPI) raised by 184.2 points to 13,812, and the Selective Categories Index (CSCX) gaining 113 points to 8,446.

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