The daily turnover on the Dhaka Stock Exchange (DSE) crossed the Tk 16 billion mark for the first time in nearly two years on Sunday, as growing investor confidence continued to fuel trading activity amid sweeping regulatory reforms.
Turnover-a key indicator of market participation-rose to Tk 16.70 billion, up 17 per cent from the previous session. It was the highest daily turnover since August 2024, signalling a strong revival in investor sentiment after a prolonged period of subdued trading.
The market rally also gathered further momentum, with the benchmark index of the premier bourse advancing 45.17 points, or 0.78 per cent, to close at 5,849-the highest level in almost two years.
Market operators said the sustained rally had been driven by growing investor optimism over ongoing regulatory reforms and the government's renewed commitment to capital market development. The rise in index and turnover was the outcome of broad-based accumulation of fundamentally sound stocks trading at attractive valuations.
"The steady rise in turnover suggests that institutional investors are becoming increasingly active, while retail investors are also returning to the market," Md Sajedul Islam, a shareholder director of the DSE, told the FE by phone.
The market has also responded positively to capital market-friendly fiscal measures incorporated in the final budget, which are expected to improve the competitiveness of listed companies, he said.
Investor sentiment received another boost after Prime Minister Tarique Rahman last week announced in parliament a comprehensive reform package aimed at restoring stability in the capital market, rebuilding investor confidence and ensuring accountability for those responsible for market manipulation that inflicted heavy losses on thousands of investors, market analysts said.
Akramul Alam, head of research at Royal Capital, said supportive fiscal measures and the securities regulator's reform agenda have significantly improved investor confidence.
"The market remained undervalued for a long time, with the overall market price-to-earnings ratio standing at only 9.3. Investors are now gradually regaining confidence and increasing their exposure to equities," he said.
According to Mr Alam, many fundamentally strong companies are still trading at attractive multi-year valuations, prompting investors to inject fresh funds in anticipation of healthy long-term returns.
Large-cap stocks led Sunday's rally. Strong gains in BRAC Bank, Walton Hi-Tech Industries, Pubali Bank, Islami Bank Bangladesh and IDLC Finance together accounted for nearly half of the benchmark index's gain.
Mr Alam said investor confidence had strengthened considerably since the appointment of renowned chartered accountant Masud Khan as chairman of the Bangladesh Securities and Exchange Commission (BSEC) in early June.
"The new BSEC leadership has sent a strong message that restoring discipline, transparency and investor confidence is now a top priority."
The new commission has already undertaken several market-friendly initiatives, including removing floor prices from the remaining two stocks, restoring the stock exchanges' authority to determine circuit breakers and strengthening market surveillance.
The BSEC chief has also announced plans to review margin loan rules, simplify public issue regulations, incorporate a direct listing framework for eligible private companies, launch day netting for selective quality stocks and shorten the settlement cycle to T+1.
Market participants believe these measures will encourage greater participation by both retail and institutional investors while making equities more attractive relative to other financial assets.
"The regulator's reform initiatives have created positive expectations among investors, who believe the market is moving towards a more transparent, efficient and well-governed environment," Mr Islam added.
The blue-chip DS30 index climbed 23 points to 2,200 on Sunday, while the Shariah-based DSES index gained 3 points to close at 1,192.
Market breadth remained positive, with 199 issues advancing, 156 declining and 37 remaining unchanged.
The mutual fund sector emerged as the top performer, gaining 6.4 per cent, amid positive investor sentiment following the BSEC chief's pledge to revise the Mutual Fund Rules. Unit prices of 32 out of 36 close-ended mutual funds increased.
Lavello Ice-cream emerged as the most-traded stock, with shares worth Tk 697 million changing hands. Bangladesh Shipping Corporation, Malek Spinning, Eastern Housing, Beximco Pharma and IT Consultants were among the other most actively traded stocks.
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