The equity market saw a rebound this week as bargain hunters sought to capitalise on attractive bank stocks amid renewed optimism following a challenging 2024, which witnessed the largest fall in four years.
The New Year started on a positive note, with opportunistic investors taking advantage of oversold stocks that had experienced significant corrections in the previous year.
Analysts said the market recovery was largely supported by specific shares from the heavyweight banking sector, particularly after major banks reported substantial growth in operating profits for 2024. However, investor sentiment across the broader market remains subdued.
The market witnessed a buying pressure for the first three days of the week while the last one saw moderate correction. The market closed on December 31 due to a bank holiday, resulting in only four trading days for the week.
DSEX, the broad index of the Dhaka Stock Exchange, finally settle the week 15 points or 0.29 per cent higher at 5,199. This followed a 37-point decline the previous week.
The blue-chip DS30 index, a group of 30 prominent companies, rose 4 points to 1,931. However, the DSES index, which represents Shariah-based companies, shed 12 points to close at 1,155.
In its weekly analysis, EBL Securities said the certain stocks from the giant bank sector remained resilient this week owing to positive expectations following the year-end closing.
The price appreciation of leading bank stocks such as Islami Bank, BRAC Bank, City Bank, United Commercial Bank and Pubali Bank largely supported the overall market recovery as they jointly accounted for a 42-point weekly gain for the index.
Islami Bank, which surged 6.72 per cent this week, contributed a 23-point rise to the key index alone. The bank's stock closed at Tk 50.9 on Thursday.
BRAC Bank, another blue chip stock, also added 7.2 point to the prime index while City Bank and United Commercial Bank added 5 points and 2.5 points respectively to the key index.
The leading banks secured double-digit growth in operating profit year-on-year in 2024, driven by substantial income from investment in government securities, which drove their stock price up, said a leading broker.
The net interest income, the core source of income for banks, was not as overwhelming, but earnings from government securities supported the lenders' impressive growth in an adverse climate engendered by inflationary pressure.
BRAC Bank, for example, reported a remarkable 72 percent year-on-year increase in its operating profit for 2024, reaching Tk 24 billion. Similarly, Pubali Bank saw a 51 percent growth, with its operating profit rising to Tk 23.75 billion, according to provisional data.
The City Bank's operating profit also surged by 70 per cent year-on-year to Tk 22.87 billion in 2024.
However, investors stayed mostly observant of the market's trend in the absence of any major trigger for the market, said EBL Securities.
Turnover, a crucial indicator of the market, stood at Tk 13.92 billion this week, up from Tk 11.74 billion the previous week.
Consequently, the average daily turnover increased by nearly 19 per cent, reaching Tk 3.48 billion, up from Tk 2.99 billion the previous week.
Investors were mostly active in the banking sector, which accounted for 17.3 per cent of the week's total turnover, followed by pharma (16.9 per cent) and engineering sector (8.8 per cent).
However, most of the traded stocks saw price erosion, as out of 396 issues traded, 182 closed lower and 164 higher while 50 remained unchanged.
The large-cap sectors saw positive performance. Banking experienced the highest gain of 3.4 per cent followed by telecom with 1.4 per cent, and food 1.1 per cent.
On the other hand, the non-bank financial institutions saw the highest correction of 1.6 per cent, followed by pharma 1.40 per cent and power 0.20 per cent.
Orion Infusion was the most-traded stock with shares worth Tk 842 million changing hands, followed by Robi Axiata, Bangladesh Shipping Corporation, City Bank and Pubali Bank.
The Chittagong Stock Exchange (CSE) also ended lower, with CSE All Share Price Index (CASPI) rising 117 points to settle at 14,552 and its Selective Categories Index (CSCX) gaining 66 points to 8,859.
The port-city bourse traded 13.96 million shares and mutual fund units, with a turnover value of Tk 1.67 billion, primarily driven by strong performances from Square Pharma, and Meghna Petroleum.
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