The benchmark index of the Dhaka Stock Exchange (DSE) extended its winning streak for the third week in a row, buoyed by sustained investor interest in banking stocks amid expectation of favourable post-election momentum.
Analysts attributed the ongoing recovery to broad-based investor participation, noting that investor confidence has been bolstered by opportunistic buying in lucrative stocks, as market participants anticipate political stability and a potential macroeconomic recovery following the national elections.
The ongoing earnings season has also played a key role, further strengthening market sentiment. In total, 20 listed companies released their quarterly financial results this week, with investors making informed decisions based on the companies' performances.
Ahsanur Rahman, CEO of BRAC EPL Stock Brokerage, said that banks are poised to benefit the most from any potential economic recovery.
The banks have been deprived of the benefits from exports and imports due to prolonged economic slowdowns, Rahman said, adding that many investors believe that the earnings of the banks will rise if the economy sees any recovery in the post-election phase.
Ongoing reforms in the banking sector have also led more robust banks to remain optimistic about future growth in operating profits. "That is why strong banks, like BRAC Bank, have seen increased interest from both local and foreign investors," he added.
The banking sector was the main focus for investors this week, accounting for nearly 19 per cent of the total market turnover. The sector saw a 4 per cent gain during the week, underscoring its pivotal role in driving overall market growth.
This week, the market saw four trading sessions. The market opened the week on a strong footing and sustained positive momentum through the first three sessions. However, the final session pared some gains amid profit-booking pressure.
As a result, the benchmark DSEX index finally settled the week more than 80 points or 1.55 per cent higher at 5,234.
Over the past three weeks, the DSEX has gained a total of 215 points while the market-cap surged Tk 152 billion to Tk 6.99 trillion at the end of this week.
EBL Securities, in its weekly market analysis, said the market maintained its upward trajectory, supported by broad-based participation as investors accumulated perceived undervalued blue-chip stocks, with sustained buying interest and heightened participation amid perceived clarity on the political front surrounding the national election.
The blue-chip DS30 index, a group of 30 prominent companies, also climbed 15 points to close at 2,002 while the DSES index, which represents Shariah-based companies, gained 38 points to 1,072.
The price gain of selective large-cap stocks, including Islami Bank, Walton, Al-Arafah Islami Bank, BRAC Bank and Renata, largely contributed to the market surge. These five stocks accounted for a 107-point rise in the DSEX.
Islami Bank alone added more than 57.6-point to the prime index as the bank's stock jumped 21 per cent during the week. Walton also accounted for 19.2 points rise in the major index, followed by Al-Arafah Islami Bank (18.5 points).
Despite the total market turnover being lower this week -- standing at Tk 26.73 billion compared to Tk 28.97 billion last week -- the increase in market participation is still evident, as this week saw four trading days compared to previous week's five days.
Accordingly, the average daily turnover stood at Tk 6.68 billion, up 15 per cent from the previous week's average of Tk 5.79 billion.
However, there is also a cause for concern, as 'Z' category stocks continued to dominate the top 10 weekly gainers' chart, suggesting possible market manipulation.
Nine such stocks -- International Leasing, Premier Leasing, FAS Finance, Peoples Leasing, GSP Finance, BIFC, Fareast Finance, Uttara Finance and Prime Finance -- featured among the top 10 gainers this week, with their prices soaring between 26.8 per cent and 47.5 per cent.
Also, gainers outnumbered the losers on the DSE floor. Of the 389 issues traded, 231 closed higher and 141 ended lower while 17 remained unchanged.
Major sectors showed positive performance. The engineering sector posted the highest gain of 5.66 per cent, followed by banking, pharma, food and power sectors.
BRAC Bank became the most-traded stocks, with shares worth Tk 856 million changing hands, closely followed by Asiatic Laboratories, Islami Bank, Dominage Steel and City Bank.
The Chittagong Stock Exchange also ended higher with its All Shares Price Index (CASPI) rising 262 points to close at 14,731, while the Selective Categories Index (CSCX) surged 158 points to 9,122.
The port city bourse traded 7.88 million shares and mutual fund units with turnover value of Tk 293 million.
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