The benchmark equity index of the Dhaka Stock Exchange (DSE) posted a modest weekly gain after a volatile week, surging sharply on the first trading day following the much-awaited national election, but the remaining sessions pared most of the gains.
The BNP-led alliance secured an absolute majority in the 13th parliamentary election held on February 12.
The market jumped more than 200 points in the opening session as investors celebrated the landslide victory of BNP, rushing to buy undervalued blue-chip stocks amid heightened optimism.
However, the enthusiasm proved short-lived. Over the next four trading days, the index gave up two-thirds of the initial gain as cautious investors moved to lock in quick profits.
Market analysts said traders who were highly active immediately after the election preferred to secure short-term returns rather than hold positions amid policy uncertainty.
A leading stockbroker said investors were carefully assessing the likely policy direction and regulatory environment under the new administration.
He noted that the new government has yet to outline a concrete roadmap for the capital market.
"Investors appear to be waiting for clearer signals before injecting fresh funds," he said.
Institutional investors are also expecting changes in the top leadership of the Bangladesh Securities and Exchange Commission (BSEC) following the political transition, with lobbying reportedly intensifying for key posts.
In his election manifesto, BNP chairman and Prime Minister Tarique Rahman pledged to appoint qualified, honest and competent individuals to senior positions at the securities regulator.
Despite the late-week pullback in sentiment, the benchmark DSEX index settled the week 66 points, or 1.22 per cent, higher at nearly 5,466, extending the rally for the fifth week in a row.
Over the past five weeks, the DSEX has gained a total of 447 points while the market-cap surged by Tk 258 billion to Tk 7.10 trillion at the end of this week.
EBL Securities, in its weekly market analysis, said the week began with a strong rally following the election holidays, sparking broad-based optimism over a favourable post-election market trajectory that propelled the benchmark index to the 5,600-mark after around six months.
However, the optimism moderated in the subsequent sessions, with profit-booking emerging across the bourse as investors turned cautious, closely monitoring market direction amid the potential policy direction and regulatory environment under the newly elected government, said the stockbroker.
The blue-chip DS30 index, a group of 30 prominent companies, also rose 39 points to close at 2,098. However, the DSES index, which represents Shariah-based companies, shed 2 points to 1,095.
The price gain of selective blue-chip stocks such as BRAC Bank, Square Pharma, National Bank, City Bank and AB Bank, largely contributed to the market surge. These five stocks accounted for a 54-point rise in the DSEX.
BRAC Bank alone added more than 17.6-point to the prime index as the bank's stock jumped 5.4 per cent during the week. Its stock also jumped more than 17 per cent in a month to close at Tk 82.9 on Thursday.
Market participation also remained buoyant, as total market turnover stood at Tk 55.5 billion this week as against Tk 19.15 billion in the week before.
Accordingly, the average daily turnover stood at Tk 10.5 billion, a 64 per cent jump from the previous week's average of Tk 6.38 billion.
Gainers strongly outnumbered the losers on the DSE floor. Of the 389 issues traded, 203 closed higher and 153 ended lower while 33 remained unchanged.
Major sectors showed mixed performance. The non-bank financial institutions sector posted the highest gain of 1.7 per cent, followed by banking, and food. However, engineering, power and telecom sectors faced modest correction.
Square Pharma became the most-traded stocks, with shares worth Tk 2.08 billion changing hands, closely followed by City Bank, Dhaka Bank, BRAC Bank and Asiatic Laboratories.
The Chittagong Stock Exchange also ended higher with its All Shares Price Index (CASPI) rising 315 points to close at 15,349, while the Selective Categories Index (CSCX) surged 157 points to 9,429.
The port city bourse traded 37.73 million shares and mutual fund units with turnover value of Tk 944 million.
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