The return from the broad index in the first two months of the ongoing calendar year shows signs of recovery from the prolonged losses in the previous years, frustrating investors.
The DSEX, broad index of the Dhaka Stock Exchange (DSE), advanced 0.59 per cent to 5,247.30 points in the two months to February 27.
During the same period, the broad indices of Pakistan, India, Philippines, Indonesia and Thailand fell between 1.63 per cent and 14.03 per cent.
According to EBL Securities, the DSE logged a steady recovery, primarily riding on investors' active participation in certain large-cap scrips as anticipation builds surrounding the companies' corporate earnings and dividend declarations.
Experts say the recent developments in the country's macroeconomic situation played a supportive role in generating returns by the broad index of the Dhaka bourse.
They say the market stayed positive in the last two months as the central bank kept the policy rate unchanged at 10 per cent for the second half of the current fiscal year.
The decline in the yields of Treasury bills and bonds by 1.5-2.0 percentage points in recent auctions also boosted hope for fresh investments in the equity market.
"The current situation indicates that the market has almost bottomed out," said Md. Ashequr Rahman, managing director of Midway Securities.
"The more economic and political situations [of Bangladesh] become stable the stronger the recovery of the market will be," he added.
Of the regional markets, the Sensex of the Bombay Stock Exchange (BSE) fell 6.32 per cent in January-February, according to a review of EBL Securities.
The Indian market began experiencing erosion last October as foreign investors started withdrawing funds and diverting them to the United States of America and China.
The victory of Donald Trump in the last year's presidential election in the US gave rise to hope among foreign investors that he would slash corporate tax and strengthen the dollar.
On the other hand, some funds were moved to the Chinese market as the government of the country stimulated their market through a stabilisation fund.
Mr Rahman said the withdrawal of funds by foreigners from India would not affect the Indian market significantly because of a strong base of institutional investors.
Besides, the well-regulated mutual fund industry in India also supports the Indian market.
"But the market here does not enjoy stability for long in the absence of sufficient quality scrips. The capacity of institutional investors is also not up to the mark," Mr Rahman added.
Owing to low investor participation, the DSEX featured turnovers below Tk 4 billion in most of the sessions executed last December.
EBL Securities said a gradual, though slow, decrease in interest rates in the money market created optimism among investors about the recovery of the market.
Hence, investors' participation increased, resulting in a three-month high turnover of Tk 6.1 billion on February 25.
Average daily turnover in January jumped 25.8 per cent from the previous month to Tk 4.6 billion.
The sign of recovery became stronger in February when the DSEX gained 2.36 per cent. The sectors that supported the gains included travel & leisure, bank, and telecom.
In most of the sessions executed in February, the banking sector dominated the chart of top sectoral turnovers because of the stocks' lucrative price level.
Riding on the supportive parameters, the DSEX settled at a 2-month high of 5,247 points in the last session of February, up by 134 points, or 2.6 per cent from the month before.
The DSEX lost 16.29 per cent in one year ended in February while the loss in the three years to February 2025 was 22.14 per cent.
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