The stock market extended a winning streak for the third day in a row on Tuesday, with the key index of the Dhaka bourse crossing 5,200 mark after three weeks amid renewed optimism.
The market rally was largely supported by fundamentally-strong stocks, driven by favorable quarterly earnings disclosure of some of the companies.
Buyers remained on the dominant side as opportunistic investors sought oversold stocks, which they deemed lucrative at the prevailing price levels.
As investor sentiment was upbeat, the daily turnover went up 17 per cent to Tk 5 billion on Tuesday. It was the biggest single-day turnover this year.
Along with the rising turnover, DSEX, the benchmark index of the Dhaka Stock Exchange, was up about 7 points or 0.13 per cent to 5,202.
The DSEX gained 68 points in the three trading days while the market cap surged by Tk 50 billion during the period.
Some of the key financial indicators, such as remittance and exports, have increased while yield rates of government securities have fallen, boosting investor confidence in the equity market.
The declining trend of the yield rates of government securities coupled with lucrative price levels of fundamentally-sound stocks attracted investors, said Akramul Alam, head of research at Royal Capital.
According to the statistics of the Bangladesh Bank (BB), the cut-off yield for 91-day, 182-day and 364-day Treasury bills was 11.65 per cent, 11.90 per cent and 11.99 per cent respectively on December 8 last year.
The interest rates against the T-bills fell to 11.29 per cent, 11.57 per cent and 11.74 per cent by January 19 this year.
The interim government started reducing the interest rates of government debt securities in September last year because of its lower appetite for domestic borrowings.
"Usually, when the yield rate of government securities falls, the equity market gets a boost," said Mr Alam, adding that if the T-bond rates came down to a single-digit, the market will rise further.
Besides, due to significant price erosion last year, most stocks are now at a lucrative price level, he said.
The price-to-earnings (P/E) ratio of stocks on the DSE stood at 10.3 at the end of 2024, the lowest in at least the past 10 years.
Mominul Islam, chairman of the DSE, recently said the stock market was expected to regain momentum by June this year due to ongoing reforms.
"Reforms have already begun, and some measures will be completed by June. These steps will help restore investor confidence," said the DSE chairman.
EBL Securities said the market kept rising as bargain hunters continued to show their buying interest in certain stocks ahead of the earnings declarations for the recently ended quarter in anticipation of short-term gains.
Price hikes of selective large stocks helped the market stay afloat as they have a significant impact on the index, it said.
Best Holdings, Beximco Pharma, BRAC Bank, Grameenphone and Islami Bank were top positive index contributors. They jointly accounted for an 8-point rise of the key index on Tuesday.
The blue chip index DS30, a group of 30 prominent companies, rose 2 points to 1,925 while the DSES Index, which represents Shariah-based companies, gained 2 points to 1,172.
Most of the traded issues saw price appreciation, as out of the 401 issues traded, 165 closed higher, 156 ended lower and 80 remained unchanged on the DSE trading floor.
Investors were mostly active in the pharmaceutical sector, which accounted for 19 per cent of the day's total turnover, followed by textile (13 per cent) and banking (9 per cent) sectors.
Most sectors posted gains. Among the major sectors, the non-bank financial institution posted the highest gain of 1.3 per cent, followed by telecom, pharma, engineering, and banking sectors.
Orion Infusion was the most-traded stock, with shares worth Tk 232 million changing hands, followed by ADN Telecom, Fareast Knitting, Asiatic Laboratories and Khan Brothers.
Best Holdings was the top gainer, rising 9.88 per cent while Associated Oxygen was the worst loser, shedding 10 per cent.
The Chittagong Stock Exchange (CSE) also ended higher with its All Share Price Index (CASPI) rising 61 points to 14,511 and the Selective Categories Index (CSCX) gaining 38 points to 8,830.
© 2025 - All Rights with The Financial Express
