The banking sector has recently been making top contributions to daily turnover on the Dhaka bourse, supported by investors' increased participation.
The sector's dominance has mainly been driven by two banks -- Midland Bank and NRB Bank. The two lenders topped the chart of turnover leaders on the Dhaka Stock Exchange (DSE).
On Wednesday, the premier bourse featured a turnover of Tk 4.51 billion, of which 16.6 per cent or Tk 750.6 million came from transactions of bank shares.
On the day, NRB Bank was the number one turnover leader, with a transaction value of Tk 138.3 million. Midland Bank was also on the chart of top 20 turnover leaders.
In the previous session on Tuesday, the banks contributed Tk 832 million to the daily turnover, and NRB Bank was the number one turnover leader.
Usually, the pharmaceuticals & chemicals sector sees high transactions on the premier bourse. In recent times, the banking sector outstripped the pharmaceuticals & chemical companies in terms of turnover value.
Md. Ashequr Rahman, managing director of Midway Securities, said investors' increased participation in the two banks was not backed up by their performance.
NRB Bank experienced a decline in earnings year-on-year in July-September this year. The bank has reported an EPS (earnings per share) of Tk 0.12 for July-September, down from Tk. 0.86 (restated) for the same quarter last year.
Midland Bank also reported a year-on-year decline in earnings for July-September this year. Its EPS fell to Tk 0.09 for July-September from Tk 0.22 for the same period of the previous year.
Mr. Rahman said sometimes sectoral shifting is observed when the market remains depressed for a long time.
He also said banks were in a suitable position in business, compared to companies of other sectors, mainly because of safe returns from fixed income securities.
Some banks are able to secure a wider interest spread -- around 3 per cent from Treasury bonds.
The performance of other sectors was not satisfactory in the first quarter of FY25.
In this situation, the banking sector may have boosted hope of investors, Mr Rahman added.
The DSEX, of the Dhaka bourse, on Wednesday advanced 1.06 per cent or 54.80 points to close at 5,197 points.
Of the total issues traded, 329 advanced, 37 declined and 29 were unchanged. The DSE posted a turnover of Tk 4.51 billion.
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