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The benchmark equity index of Dhaka Stock Exchange (DSE) rebounded this week, driven by a wave of optimism among investors following growing political clarity surrounding the upcoming national elections.
Market analysts said the investors' optimism over evolving political developments offered some relief to the broadly subdued market sentiment and the announcement of the election timeline encouraged investors to accumulate in the beaten-down stocks.
Meanwhile in a major development, Acting BNP Chairman Tarique Rahman returned home from London on Thursday after 17 years in exile. As the largest political party, his return will have a very positive impact on the county's political landscape, analysts say.
They believe that Rahman's homecoming will help ease political tensions, paving the way for improved public confidence in both business and financial markets.
Saiful Islam, president of DSE Brokers Association, said, "If stock investors believe that political tensions are easing, it alone can improve liquidity and risk appetite."
Rahman's return is viewed as critical for restoring investor confidence and reviving stalled reforms in the country's economy. His return is expected to send a positive signal to both local and foreign economic stakeholders.
The stock market itself showed 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.
Despite a mild pullback due to profit-booking selloffs, the broad index ultimately closed the week on a positive note.
This week, the market saw four trading sessions as the market remained closed on Thursday due to Charismas. Of them, two sessions closed higher while two saw marginal correction.
The prime DSEX index finally settled the week 52 points or 1.08 per cent higher at 4,883, after losing 132 points in the week before due to political violence centring on the death of Osman Hadi.
The blue-chip DS30 index, a group of 30 prominent companies, also rose 23 points to close at 1,882 while the DSES index, which represents Shariah-based companies, gained 8 points to 1,008.
EBL Securities, in its weekly market analysis, said the market regained its recovery momentum as bargain hunters seized opportunities in oversold stocks amid investor anticipation of perceived clarity surrounding the upcoming national election.
Price surge of blue-chip stocks, including Eastern Bank, BRAC Bank, Beacon Pharma, City Bank and Bangladesh Shipping Corporation, largely contributed to the market index rise. These five stocks accounted for a 15-point gain in the DSEX.
However, the market liquidity remained subdued as the total turnover stood at Tk 14.35 billion as against Tk 15.50 billion in the week before.
Accordingly, the average daily turnover stood at Tk 3.58 billion, down 7 per cent from the previous week's average turnover of Tk 3.88 billion.
Investors were mostly active in the textile sector, which accounted for 18 per cent of the week's total turnover, followed by food (12 per cent) and engineering sector (11 per cent).
Gainers outnumbered the losers, as out of 386 issues traded, 241 saw price jump while 101 others ended higher and 44 issues remained unchanged on the DSE floor.
Most of the major sectors showed positive performance. The power sector posted the highest gain of 1.3 per cent, followed by banking, food, telecom, engineering, non-bank financial institutions and pharma sectors.
Bangladesh Shipping Corporation became the most-traded stocks, with shares worth Tk 696 million changing hands, closely followed by Saiham Cotton Mills, Simtex Industries, City general Insurance, and Dominage Steels.
The Chittagong Stock Exchange also rebounded, with its All Shares Price Index (CASPI) gaining 18 points to close at 13,642, while the Selective Categories Index (CSCX) rose 5 points to 8,409.
The port city bourse traded 16.92 million shares and mutual fund units with turnover value of Tk 498 million.
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