Stocks extend rally for fourth week on reform, budget hopes

Bangladesh's stock market extended its rally for a fourth consecutive week, driven by optimism over the new leadership of the Bangladesh Securities and Exchange Commission (BSEC) and expectations of market-friendly measures in the proposed FY2026-27 budget.

Despite bouts of profit-taking, investor sentiment remained positive. Over the past four weeks, the benchmark DSEX index has gained 286 points, while average daily turnover has nearly doubled to around Tk1,500 crore, reflecting renewed confidence in the market.

The DSEX rose 45 points during the week to close at 5,520. The blue-chip DS30 gained 5 points to 2,073, while the Shariah-based DSES edged up 0.21 points to 1,067. The SME-focused DSMEX advanced 6 points to 1,115.

Trading activity strengthened further. Average daily turnover increased 11.4% to Tk1,288 crore from Tk1,156 crore a week earlier, taking total weekly turnover to Tk6,438 crore. Market capitalisation, however, slipped 0.43% to Tk6,90,011 crore.

Of the 412 issues traded on the Dhaka Stock Exchange, 183 gained, 173 declined, and 30 remained unchanged, while 26 saw no trading activity.

Market participants said many stocks battered by prolonged selling pressure have reached attractive valuations, encouraging investors to rebuild positions. Confidence was also supported by expectations that the new BSEC commission will strengthen governance, market discipline and investor protection.

The week began strongly, extending the market's winning streak to 10 consecutive sessions. Buying interest was concentrated in banks, financial institutions, insurance companies and fundamentally strong stocks trading at discounted prices.

The rally briefly paused midweek as investors booked profits and adopted a cautious stance ahead of the national budget announcement. However, sentiment improved later as expectations grew for measures to stimulate private-sector growth and support the capital market.

According to BRAC EPL Stock Brokerage, the market maintained an overall positive trajectory, closing higher on three of the five trading sessions. Strong performances by insurance, non-bank financial institutions, telecommunications, and fuel and power stocks outweighed weakness in banking and food sectors.

The General Insurance sector was the week's top performer, gaining 5.94%, while Telecommunications led among large-cap non-financial sectors with a 1.64% rise.

EBL Securities said investors remained optimistic about regulatory reforms under the new BSEC leadership and potential fiscal support in the budget. The brokerage noted that broad-based accumulation of beaten-down stocks drove the early rally, while selective buying later helped the market recover from the midweek correction.

Investor participation was highest in General Insurance, which accounted for 19.3% of total turnover. Engineering followed with 12.9% and Pharmaceuticals with 10.5%.

Among sectors, Services gained 7.8%, Ceramics 6.5% and General Insurance 6.2%. Miscellaneous fell 11.9%, while Travel & Leisure and Jute declined 2.3% and 1.3% respectively.

Analysts say sentiment is gradually improving after a prolonged downturn, supported by expectations of regulatory reforms and policy support. However, they cautioned that sustaining the rally will depend on the implementation of reforms and measures that encourage long-term investment.