The benchmark equity index rebounded this week, as investors' interest in select stocks with short-term growth potential fuelled a market recovery following the resolution of a standoff at the Bangladesh Securities and Exchange Commission (BSEC).
The last week's four-day stalemate at the BSEC ended earlier this week as protesting employees called off their strike and returned to work on Sunday.
The market remained largely upbeat throughout the week, as buyers continued to dominate. The recovery was further supported by price increases in several large-cap stocks, which had recently seen a correction.
Of the five trading days this week, four sessions closed higher as the market witnessed a buying pressure from opportunists' investors.
DSEX, the key index of the Dhaka Stock Exchange (DSE), finally settled the week nearly 22 points or 0.42 per cent higher at 5,226. It shed 43 points the previous week.
The blue-chip DS30 index, a group of 30 prominent companies, also gained more than 12 points to close at 1,901 while the DSES index, which represents Shariah-based companies, rose 4 points to 1,165.
In a weekly analysis, EBL Securities said the market backed in a gaining streak despite an abrupt regulatory instability weighing on investors sentiment in the opening session of the week, as market recovery extended in the subsequent sessions due to investors' buying activity in sector-specific stocks.
"Investor confidence was reinstated as the regulatory environment stabilised, while optimistic investors sought to take positions in certain stocks with short-term gain potential, driving a four-day gaining streak for the broad index," said the stockbroker.
Despite prevailing political and economic uncertainty, a section of investors bought specific undervalued stocks with strong growth potential, contributing to the market recovery, said a leading stockbroker.
Also, the investor participation was observed in certain December-closing bank stocks ahead of their corporate declarations, along with select blue-chip shares, he added.
Price surge of selective stocks, such as Square Pharmaceuticals, Al-Arafah Islami Bank, Beximco Pharma, BRAC Bank, United Commercial Bank and Southeast Bank pulled the market index up as they jointly accounted for a 20-point rise in the key index.
Square Pharma alone contributed a 4.5-point rise to the key index as sponsor-directors of the largest drug maker are buying shares from the main market and block market.
This week, Samuel S Chowdhury, Tapan Chowdhury and Ratna Patra -- directors of Square Pharma -- expressed their intention to buy 4.5 million shares in total from the main and block market within 30 working days.
"When directors or sponsors showed interest to buy shares of their own firm, it indicates that they have confidence in the prospect of their company, which also inspires general investors," said Akramul Alam, head of research at Royal Capital.
However, low performing stocks continued to see price surge, without any reason for investors to be keen on betting on these stocks.
Two state-owned loss-making sugar mills -- Shyampur Sugar and Zeal Bangla Sugar -- featured in the weekly gainer list, soaring 21.6 per cent and 10.9 per cent respectively this week despite their ongoing financial struggles.
Turnover, a crucial indicator of the market, stood at Tk 19.55 billion this week, up from Tk 18.13 billion in the week before.
Consequently, the average daily turnover rose to Tk 3.91 billion, rising 8 per cent from Tk 3.62 billion over the previous week.
Investors were mostly active in the food sector, which accounted for 14 per cent of the week's total turnover, followed by the pharmaceuticals sector (13.8 per cent) and textile sector (13.5 per cent).
The major sector showed mixed performance this week. The pharmaceuticals, banking and food sectors posted gains while power, non-bank financial institutions and telecommunication sectors suffered losses.
Orion Infusion was the most-traded stock for the third straight week with shares worth Tk 1.20 billion changing hands.
The Chittagong Stock Exchange (CSE) also ended higher, with CSE All Share Price Index (CASPI) gaining 74 points to 14,576 while its Selective Categories Index (CSCX) rose 56 points to 8,850. The port-city bourse traded 11.88 million shares and mutual fund units.
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