DSE extends recovery amid growing confidence of investors

The Dhaka Stock Exchange (DSE) continued its upward trend, with the benchmark index rising significantly over the past week.

“This positive market sentiment was fuelled by several factors, including discussions on early share settlements, liquidity support through the Investment Corporation of Bangladesh (ICB), and potential capital gains tax cuts,” said the market analysts.

Investors were seen actively shifting their positions, either securing profits from previous investments or reallocating funds to stocks with promising earnings reports. This selective approach, driven by optimism, contributed to the overall market momentum.

The DSE‍‍`s broad index, DSEX, gained a substantial 116.9 points, or 2.2 percent, closing at 5,316 points. Market turnover increased by 45.4 percent to TK 605.8 crore compared to the previous week.

The DSEX added 202 points in the past two consecutive weeks after losing 616 points in the previous five weeks.

The DSE‍‍`s sectoral indices also performed well. The DS30 Index, comprising 30 leading companies, gained 39 points to close at 1,965 points. Similarly, the DSES Index, representing Shariah-compliant companies, rose 43 points to 1,188 points.

The market capitalization increased by Tk 6500 crore, reaching Tk 6,71800 crore at the end of the week.

Market turnover, a key indicator of market activity, surged to Tk 3029 crore this week, significantly higher than the previous week‍‍`s turnover of Tk 2083 crore. This resulted in an average daily turnover of Tk 606 crore, a 45 percent increase compared to the previous week‍‍`s average of Tk 416 crore.

Sectoral Performance:

Top Performers: Paper & Printing sector led the gainers with a 10.4 percent increase.

Moderate Correction: The Food sector experienced a slight 0.7 percent correction.

Investor Interest: Pharma, Bank, and Textile sectors remained popular among investors, attracting 19.5 percent, 15.6 percent, and 8.9 percent of the total turnover, respectively.

Overall, the market‍‍`s positive trajectory reflects growing investor confidence and anticipation of favorable regulatory policies.

M Mashrur Reaz, chairman of the think tank Policy Exchange Bangladesh (PEB), said the capital market is getting stability as the confidence grows among the investors for recent regulatory measures.

He also focused on a plan to develop a national strategy for sustainable long-term financing source of the capital.

Saiful Islam, President of the DSE Brokers Association of Bangladesh (DBA), the decision of tax cut by the National Board of Revenue (NBR) was a timely intervention in the market.

He expressed optimism about the recent reduction in the capital gains tax rate and believes this move will significantly contribute to the market‍‍`s recovery and increased liquidity.

“It is expected to help the market overcome the prolonged bearish trend and encourage greater investor participation," he added.