Stocks rebounded strongly this week as the benchmark index of the Dhaka Stock Exchange (DSE) crossed the 5,700-point mark for the first time in 22 months, buoyed by capital market-friendly fiscal measures, easing geopolitical tensions in the Middle East and growing optimism over regulatory reforms.
The market opened the week on a strong note, led by broad-based buying across sectors as investors sought to take advantage of tax rebate opportunities. Positive sentiment persisted throughout the week.
The benchmark DSEX index gained 91 points, or 1.61 per cent, to close the week at 5,744, recovering from a nine-point loss in the previous week.
This week, the market traded for four sessions, as Wednesday remained closed for the Bank Holiday. The first three sessions ended higher, while the final session saw a modest decline.
Despite the late pullback, trading activity remained robust, reflecting sustained investor participation.
The DS30 Index, which tracks blue-chip companies, advanced 31 points to 2,162, while the Shariah-based DSES Index rose 25 points to 1,169.
Expectations of sweeping regulatory reforms prompted investors to increase exposure to fundamentally strong stocks. Heavyweight issues, including Bangladesh Steel Re-Rolling Mills, Beximco Pharmaceuticals, Walton Hi-Tech Industries, Al-Arafah Islami Bank and City Bank, collectively contributed 28 points to the benchmark index's weekly gain.
Akramul Alam, Head of Research at Royal Capital, said the market recovery was being driven by a combination of political and economic factors, including easing domestic uncertainty, stronger foreign exchange reserves, a more stable exchange rate, moderating inflation and renewed policy attention to the capital market.
"Improved domestic fundamentals and the government's repeated commitment to capital market development have significantly boosted investor confidence," he said.
Investor sentiment received another major boost following the appointment of renowned chartered accountant Masud Khan as chairman of the Bangladesh Securities and Exchange Commission (BSEC) in early June, signalling the start of comprehensive reforms at the capital market regulator.
The new BSEC leadership has already introduced several market-friendly measures, including lifting floor prices on Beximco and Islami Bank shares, restoring the stock exchanges' authority to determine circuit breakers and trading rules, and strengthening market surveillance.
The government's budgetary measures for the capital market also buoyed investor confidence. The measures include lower taxes on dividend income, removal of investment limits for mutual fund tax rebates, easier listing requirements and continuation of tax exemptions on income from zero-coupon bonds for individual investors.
The Bangladesh Merchant Bankers Association (BMBA) welcomed the final budget for FY27, saying the extension of tax incentives for initial public offerings (IPOs), zero-coupon bonds, dividend income, banking sector support measures and rationalisation of the tax structure for mutual funds would help strengthen the market.
A leading stockbroker said the budget framework was broadly supportive of the capital market, although effective implementation and continued policy backing would be crucial for sustaining the market's recovery.
Global developments also lent support to investor sentiment. The ceasefire between the United States and Iran and the reopening of the Strait of Hormuz eased concerns over disruptions to global energy supplies.
Market participation remained robust, with total turnover on the DSE reaching Tk 57.36 billion during the week, compared with Tk 47.58 billion in the previous week.
Accordingly, average daily turnover stood at Tk 14.34 billion, marking a 51 per cent increase from Tk 9.51 billion a week earlier.
The textile sector accounted for the largest share of weekly turnover at 12.7 per cent, followed by banking (12 per cent) and pharmaceuticals (11 per cent) sectors.
Of the 391 issues traded on the DSE, 272 advanced, 90 declined and 29 remained unchanged, reflecting broad-based buying interest.
All major sectors posted gains during the week. The engineering sector recorded the highest increase, followed by power, non-bank financial institutions, pharmaceuticals and telecommunications.
Beximco emerged as the week's most-traded stock, with shares worth Tk 2.73 billion changing hands. It was followed by BRAC Bank, Malek Spinning, IPDC Finance and Summit Alliance Port.
The Chittagong Stock Exchange (CSE) also ended the week on a positive note. Its All Share Price Index (CASPI) rose 258 points to 15,408, while the Selective Categories Index (CSCX) gained 173 points to close at 9,437.
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