Daily turnover on the Dhaka Stock Exchange (DSE) surpassed the Tk 15 billion threshold on Sunday for the first time in nearly two years, as investors ramped up purchases of fundamentally strong stocks amid growing optimism over sweeping changes in the securities regulator.
The last time turnover was higher than this was Tk 20.10 billion on August 11, 2024, immediately after the overthrow of the Awami League government.
Along with soaring market turnover, the benchmark index of the prime bourse soared 41 points, or 0.75 per cent, to 5,516 - its highest level in nearly four months - as investors continued accumulating fundamentally strong stocks on expectations of reforms and improved governance in the capital market.
The upbeat sentiment was reflected across the market, with large-cap and fundamentally strong stocks leading the advance. Over the past 10 trading sessions, the DSEX has gained 313 points, while the market capitalisation of the DSE has increased by Tk 169 billion.
The latest rally came after the government appointed renowned chartered accountant Masud Khan as chairman of the Bangladesh Securities and Exchange Commission (BSEC) on Thursday. Three new commissioners were also appointed for a four-year term, signalling an overhaul in the country's capital market regulatory body.
Market analysts said the new leadership at the commission raised hopes for stronger regulation, greater transparency and long-awaited structural reforms, encouraging investors to increase their exposure to equities.
"Investors are taking the leadership change very positively," said Md Sajedul Islam, a director at the DSE.
Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage, said investors had been awaiting changes at the regulatory level following repeated indications from the finance minister.
"When the government finally brought major changes, it helped restore confidence among market participants, as we had seen in previous instances," he told The FE over the phone.
The market had responded positively because the changes were largely anticipated by investors.
The sharp rise in turnover indicates growing investor participation and suggests that confidence is gradually returning to the market after a prolonged period of subdued activity, added Mr Shawon.
While taking charge on Thursday, the newly appointed BSEC chief said the commission aims to restore investor confidence, attract quality companies to the stock market, and transform Bangladesh from a retail-driven frontier market into a transparent, institution-led emerging market.
He also spoke of his plans to undertake a comprehensive review of existing regulations, reporting requirements, and approval processes of initial public offerings (IPOs).
The BSEC chairman said many large local companies, multinational corporations and state-owned enterprises remain outside the market despite being suitable for listing. To address the issue, the regulator will actively engage with these companies and introduce a direct listing framework.
The commission will also work with the government and the National Board of Revenue to design a "Listed Company Advantage Programme", offering incentives such as a wider tax gap between listed and non-listed firms, faster approvals and simplified compliance procedures.
"Investors are optimistic that the new commission will take effective steps to improve governance and restore confidence in the market, as the new BSEC chief told the media," said Akramul Alam, head of research at Royal Capital.
He said expectations of supportive policy measures and repeated commitments from policymakers to revitalise the capital market had strengthened buying interest.
"Investor confidence strengthened on growing expectations of regulatory reforms under the new commission, with anticipated easing of IPO and margin lending regulations serving as a key catalyst for broad-based accumulation and sustained positive market momentum," he said.
The sustainability of the ongoing rally will largely depend on how quickly the new commission can translate investors' expectations into visible reforms and policy actions, said Mr Alam.
For now, however, the change in leadership has provided a much-needed confidence boost to a market that has struggled with low liquidity and weak investor participation for long, he added.
Price hikes of leading blue-chip stocks including BAT Bangladesh, Square Pharma, Walton, Renata and Grameenphone largely contributed to the rise in the key index. These five stocks accounted for half of the gain on Sunday.
"The rise in fundamentally strong stocks is a healthy sign. The market is responding positively to the changes at the regulator," said Sajedul Islam, also managing director of Shyamol Equity Management.
The market on Sunday showed strong momentum during the first half of the session, supported by sustained buying interest; however, late-session profit-taking trimmed some gains as investors capitalised on the recent rally.
The blue-chip DS30 index rose more than 19 points to 2,087, while the Shariah-based DSES index advanced 6 points to 1,115.
Market breadth remained positive, with 184 issues advancing, 160 declining and 49 remaining unchanged.
All large-cap sectors posted gains. Food and allied booked the highest gain of 3 per cent, followed by non-bank financial institutions, power, telecom, pharmaceuticals, engineering and banking.
Dominage Steel emerged as the day's most-traded stock, with shares worth Tk 396 million changing hands. IPDC Finance, Genex Infosys, Sunlife Insurance and GQ Ball Pen were also among the top turnover leaders.
The rally was not confined to the DSE. The Chittagong Stock Exchange (CSE) also ended sharply higher, with its All Share Price Index (CASPI) rising 131 points to 15,399 and the Selective Categories Index (CSCX) gaining 83 points to 9,466.
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