The benchmark equity index maintained its upward momentum this week, extending its winning streak for a third consecutive week, as regulatory measures helped ease investor concerns amid ongoing macroeconomic uncertainty.
The market rally was largely driven by fundamentally strong stocks, supported by favourable earnings reports. Moreover, news of a sovereign guarantee for Tk 30 billion in loans to the Investment Corporation of Bangladesh (ICB) further boosted investor confidence, market analysts said.
The approval of the sovereign-guaranteed loan sparked a surge in investor sentiment, driving a strong upward movement across key indices, especially in the final session of the week, said a leading stockbroker.
Also, higher-than-expected quarterly earnings from some major companies, along with the capital gains tax cuts announced by the National Board of Revenue (NBR) last week, also helped attract investors.
Of the five trading days this week, the market closed higher three days while two other sessions witnessed marginal correction.
The benchmark DSEX index of the Dhaka Stock Exchange (DSE) finally climbed 39 points or 0.73 per cent to settle the week at 5,355.
The DSEX has recovered 241 points in the past three consecutive weeks after losing 616 points in the previous five weeks.
The market reacted positively after the finance ministry issued a sovereign guarantee to the Investment Corporation of Bangladesh (ICB) for Tk 30 billion in loans from Bangladesh Bank (BB), enabling ICB to play a larger role in the capital market, said the stockbroker.
The state-run ICB will use half of the funds to repay high-cost debt and the remainder to provide liquidity support to the capital market.
"Stocks extended their winning streak, driven by investors buying interest in large-cap shares with favourable earnings for the recently ended quarter," said EBL Securities.
However, most investors remain cautious due to the market's waning momentum, amid ongoing uncertainties.
Price hikes of selective large-cap stocks and blue-chip stocks, such as Beximco Pharma, Square Pharma, Olympic Industries, Jamuna Bank and BAT Bangladesh, largely supported the ongoing market recovery. They jointly contributed 26 points to the weekly gains of the index.
The DS30 index, which represents a group of 30 prominent companies, rose 21 points to 1,986 while the DSES index, which represents Shariah-based companies, gained 1.6 points to close at 1,189.
This week, Tk 29 billion was added to the market cap, reaching Tk 6,747 billion at the end of the week. The market-cap is calculated by multiplying the total number of a company's outstanding shares by the current market price.
Turnover, a crucial indicator of the market, stood at Tk 27.70 billion this week, down from Tk 30.29 billion in the week before.
Accordingly, the average daily turnover dropped to Tk 5.54 billion, 9.0 per cent down from the previous week's average of Tk 6.05 billion.
Investors were mostly active in the pharma sector, which accounted for 15.7 per cent of the week's total turnover, followed by banking (12.8 per cent) and textile (9.5 per cent).
Most of the traded stocks, however, saw price correction, as out of 384 issues traded, 205 closed lower, 148 higher, and 31 remained unchanged.
Most of the major sectors posted gains. Fuel & Power booked the highest gain of 2 per cent, followed by food (1.2 per cent), telecom (1 per cent), and banking (0.2 per cent).
Bangladesh Shipping Corporation was the most-traded stock with shares worth Tk 1.20 billion changing hands, followed by Islami Bank (Tk 720 million), MJL Bangladesh (Tk 650 million), Square Pharma (Tk 604 million) and Fareast Knitting & Dyeing (Tk 603 million).
The Chittagong Stock Exchange (CSE) also ended higher, with CSE All Share Price Index (CASPI) rising 29 points to settle at 14,880 and its Selective Categories Index (CSCX) gaining 30 points to 9,062.
The port-city bourse traded 19.31 million shares and mutual fund units with a turnover value of Tk 668 million.
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