The benchmark index of the Dhaka Stock Exchange (DSEX) rebounded this week, paring some of the previous week's steep losses as bargain hunters returned to scoop up undervalued blue-chip stocks, even though overall sentiment remained cautious amid escalating Middle East conflict.
The week began in turmoil on Sunday, with the DSEX plummeting 232 points, or 4.42 per cent, marking its largest single-day decline in six years. The sharp sell-off was triggered by intensifying conflict in the Middle East.
Despite the bearish start, the market demonstrated resilience over the subsequent four trading sessions of the week. Buoyed by signs of a potential de-escalation in the conflict and easing local concerns regarding immediate fuel shortages in Bangladesh, investor confidence gradually returned.
At the end of the week, the DSEX had recovered 128 points, or 2.43 percent, to settle at 5,368. This weekly gain provided a partial cushion against the 359-point loss recorded in the previous week.
Market analysts attributed the turnaround to value-seeking behaviour rather than a full restoration of bullish sentiment.
"Many fundamentally strong stocks fell to lucrative price levels after the recent sharp correction, which attracted buyers," said Akramul Alam, head of research at Royal Capital.
He noted that institutional investors also increased exposure to well-performing banking shares as valuations became more attractive.
Market optimism was further bolstered after US President Donald Trump indicated that the conflict involving Iran could be nearing an end, easing fears of potential fuel supply disruptions.
Global oil prices reflected the volatility, with Brent crude falling over 7 per cent to $91.94 per barrel on Tuesday after Monday's three-year peak of $120, before rising again near $100 on Thursday.
Investor confidence also got a boost after Bangladesh Bank raised the prior-approval threshold for foreign capital repatriation from Tk 100 million to Tk 1 billion, aligning rules with international practices and encouraging foreign inflows into undervalued stocks.
The policy change encouraged foreign investors to channel fresh funds into undervalued stocks, market participants said.
In its weekly market analysis, EBL Securities said, the market witnessed a sustained recovery this week, rebounding from the steepest single-day decline in six years recorded in the opening session, as bargain hunters turned back to accumulate equities at attractive price points amid easing concerns over the potential market impact of the ongoing Middle East conflict.
Still, many investors remained cautious amid geopolitical uncertainty and the absence of a clear ceasefire in the Middle East. Bangladeshi businesses have already expressed deep concerns, saying the intensifying conflict may pose fresh challenges and drive up the cost of doing business.
The blue-chip DS30 index climbed 55 points to close at 2,066, while the Shariah-based DSES index gained 31 points to 1,079.
Price surge of blue-chip stocks, including Islami Bank, LafargeHolcim Bangladesh, City Bank, Square Pharma, Beximco Pharma, Grameenphone and BRAC Bank, largely contributed to the market index surge. These seven stocks accounted for a 54-point gain in the DSEX.
Islami Bank alone accounted for a 16.3 point gain in the DSEX as its share jumped 6.5 per cent after the bank said its board had approved a US firm as a strategic investor in its subsidiary mCash this week.
The proposed strategic investment is expected to strengthen the capital base of mCash and accelerate the expansion of digital financial services under the mobile financial services (MFS) platform, the bank said.
However, market liquidity remained subdued. Total turnover on the DSE dropped to Tk 26.57 billion from Tk 34.82 billion the previous week, with average daily turnover falling 24 per cent to Tk 5.31 billion.
Gainers significantly outnumbered losers, with 324 issues rising, 38 falling and 27 remaining unchanged among the 389 traded securities.
All sectors posted gains, led by cement, which gained 7.6 per cent, followed by telecom, non-bank financial institutions, banking, pharma, power, and engineering.
Orion Infusion was the most-traded stock with Tk 1.43 billion in turnover, followed by City Bank, Olympic Industries, BRAC Bank, and Robi Axiata.
The Chittagong Stock Exchange also rebounded, with the All Shares Price Index (CASPI) rising 155 points to 14,980 and the Selective Categories Index (CSCX) gaining 100 points to 9,160.
The port city bourse traded 43.3 million shares and mutual fund units, with turnover of Tk 1.66 billion.
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