DSEX gains for second day as investors cautiously return

The Dhaka Stock Exchange's key index, DSEX, gained for a second consecutive session today as cautious investors became more active on both the buying and selling sides, hoping for a rebound following recent corrections.

The benchmark DSEX rose by 26 points to close at 5,416. The blue-chip DS30 index, however, slipped 3 points to finish at 2,082, while the Shariah index advanced 8 points to 1,172.

Turnover increased by 16.36% to Tk697 crore, compared with Tk599 crore in the previous session. Out of 397 issues traded, 207 advanced, 130 declined, and 60 remained unchanged.

Market insiders said the interim government has already announced a roadmap for the upcoming national election, but investors remain cautious about its potential impact on both the economy and the stock market. 

As a result, some investors are adopting a wait-and-see approach before making fresh commitments.

Experts expect the market to gradually improve as yields on government bills and bonds continue to decline. They believe large investors, who are currently on the sidelines, may return once the election schedule is formally announced. The pace at which banks are mobilising deposits is also seen as a factor that could support market momentum.

Analysts note that reforms by the capital market regulator are beginning to show results, with equities becoming more attractive as government bond yields fall further. Stock market returns are currently above 10%, significantly outpacing yields on fixed-income instruments.

Akramul Alam, head of Research at Royal Capital, told The Business Standard that the market may strengthen further if treasury bill and bond rates continue to fall. 

He added that the upcoming dividend announcements and disclosures from listed companies could also have a positive impact. "We may see movement in the shares of fundamentally strong companies."

Investor confidence has also been buoyed by improving macroeconomic indicators. Bangladesh's foreign exchange reserves have stabilised and started to rise, while the government's plan to merge weaker banks has reassured the market. Political uncertainty ahead of the election has also eased somewhat.

In its daily market commentary, EBL Securities observed that the benchmark index of the Dhaka bourse held firm in positive territory on the last trading day before the Durga Puja holiday, on the back of increased participation, although cautious selling persisted as investors stayed watchful ahead of the upcoming earnings season.

The market remained upbeat throughout the session, as bargain hunters became active on the trading floor and took positions in major stocks. However, selling pressure was also evident as many investors sought to capitalise on the momentum to trim exposure and monitor the market's direction, according to the commentary.

On the sectoral front, the banking sector accounted for the highest turnover at 16.5%, followed by life insurance at 11.4% and textiles at 10.8%. Most sectors ended higher, with life insurance up 2.6%, services 1.2%, and engineering 1.2%. In contrast, cement fell 0.9%, food 0.6%, and IT 0.2%.

Meanwhile, the port city bourse, the Chittagong Stock Exchange (CSE), also closed in positive territory. The Selective Categories' Index (CSCX) gained 20.1 points, while the All Share Price Index (CASPI) advanced by 44.9 points.