Stocks extended their winning streak for a second consecutive week, as bargain hunters selectively accumulated undervalued shares in anticipation of a potential post-Eid rally.
Market analysts noted that pre-Eid selling pressure eased to some extent as only two trading sessions remain before the Eid holiday break. Investor sentiment received a further boost from a major policy easing aimed at facilitating foreign participation in the capital market.
In a significant move to attract overseas investment, Bangladesh Bank on Wednesday removed the requirement for non-resident investors to submit an auditor's certificate after every stock market sale transaction.
Foreign investors will now need to provide a tax certificate only once before repatriating funds from Bangladesh.
"This was a long-standing barrier for international participants," said a leading stockbroker, who requested anonymity. "Previously, even for small transactions, clients had to manually collect a CA certificate and submit it to their custodian bank. This lengthy process essentially prevented foreign investors from trading freely."
The week began on a weaker footing amid the absence of any decisive positive catalyst, while post-record-date adjustments in several banking stocks further dragged down market momentum.
However, sentiment gradually improved during the latter half of the week as bargain hunters accumulated beaten-down large-cap stocks at attractive valuations, helping the market recover earlier losses.
The first two trading sessions of the week closed lower, amid concerns over inflationary pressure and energy price volatility. But sentiment shifted from the third session onward as investors picked up oversold stocks, particularly in the selective banking stocks.
Several banks also reported improved first-quarter earnings on a year-on-year basis, driven mainly by higher income from investments in government securities, which further boosted investor confidence.
Of the five trading sessions during the week, the first two ended in the red while the remaining three closed higher on strong buying interest across major sectors.
By week's end, the benchmark DSEX index of the Dhaka Stock Exchange (DSE) rose 19 points, or 0.36 per cent, to settle at 5,264. The index added a total of 30 points over the past two consecutive weeks, signalling a tentative but steady recovery.
The blue-chip DS30 index gained 14 points to close at 1,995, while the Shariah-compliant DSES index advanced 3 points to 1,069.
Price surge of blue-chip stocks, including Asiatic Laboratories, City Bank, Eastern Bank, ONE Bank, and Mir Akther Hossain Ltd, largely contributed to the market index rise. These five stocks accounted for a 17-point gain in the DSEX.
Despite the rebound, overall trading activity remained subdued, reflecting investors' cautious stance on the sustainability of the ongoing recovery ahead of the national budget announcement next month.
Liquidity considerations, reduction of leveraged positions and upcoming Eid holidays also weighed on market turnover. The market will remain closed for seven days from May 25 to May 31 on the occasion of Eid-ul-Azha.
The total turnover on the Dhaka bourse declined to Tk 39.76 billion from Tk 43.97 billion in the previous week. Accordingly, average daily turnover dropped more than 9.5 per cent to Tk 7.96 billion, down from Tk 8.79 billion a week earlier.
Sector-wise, pharmaceuticals dominated turnover by accounting for 14.6 per cent of the week's total transactions, followed by general insurance at 14.4 per cent and engineering at 13.8 per cent.
Market breadth remained positive, with 184 issues advancing, 162 declining and 26 remaining unchanged among the 372 traded securities on the Dhaka bourse.
Among the major sectors, non-bank financial institutions posted the highest gain of 1.1 per cent, followed by pharmaceuticals, power, engineering and telecom. In contrast, the banking and food sectors ended the week in negative territory.
Asiatic Laboratories topped the turnover chart with shares worth Tk 1.49 billion changing hands during the week. It was followed by NCC Bank, Rangpur Dairy Food Products, Dominage Steel Building Systems and Techno Drugs.
Meanwhile, the Chittagong Stock Exchange ended the week marginally lower. The CASPI index fell 15 points to 14,700, while the CSCX index lost 3 points to close at 9,050.
Total turnover on the port city bourse stood at Tk 1.48 billion, with 32.93 million shares and mutual fund units traded during the week.
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