Stocks surge as clarity on next polls offsets Iran-Israel conflict concerns

Stocks rallied sharply today (16 June), buoyed by rising investor confidence amid easing political uncertainty surrounding the upcoming national election.

This optimism appeared strong enough to offset lingering economic concerns tied to the Iran-Israel conflict, according to market insiders.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) surged 59 points, or 1.26%, to close at 4,783, marking the third consecutive session of gains. The blue-chip DS30 index also rose by 15 points to settle at 1,787.

Of the 397 scrips traded on the day, 315 advanced, 36 declined, and 46 remained unchanged, a strong indication of broad market optimism. Market activity also picked up significantly, with turnover jumping 59% to reach Tk417 crore, hitting a 22-day high.

The rise in turnover reflects growing investor participation and signals a possible restoration of market confidence, said the market insiders.

A managing director of a brokerage firm said despite global market volatility triggered by the Israel-Iran conflict, Bangladesh's stock market closed higher yesterday, driven by renewed investor optimism.

He noted that local equities have already been trading at significant discounts, limiting the impact of external geopolitical tensions. "However, if the conflict escalates, it may fuel inflationary pressures domestically, especially as oil prices are already on the rise," he cautioned.

He attributed the day's rally to encouraging political signals ahead of the upcoming national elections.

After a meeting with BNP Acting Chairman Tarique Rahman recently in London, Chief Adviser Muhammad Yunus disclosed that the next general election is likely to take place in the week preceding Ramadan next year.

The announcement of a tentative election timeline has helped ease political uncertainty, boosting investor morale and spurring fresh buying interest. Clarity on the political front has clearly restored some market confidence, he said.

He added that investors tend to feel more secure when the prospect of an elected, stable government is on the horizon, one that can deliver consistent, long-term policy direction.

Furthermore, several investor-friendly proposals in the proposed national budget, particularly the increased tax advantage for listed companies over non-listed ones, have encouraged bargain hunters to selectively re-enter the market.

Meanwhile, the Bangladesh Securities and Exchange Commission (BSEC) has once again asked 60 listed companies to submit clear plans on how they intend to meet the minimum Tk30 crore paid-up capital requirement to remain on the main board of the stock exchanges.

The letters were issued ahead of the Eid-ul-Adha holidays. Under exchange listing rules, failure to meet the minimum capital threshold is considered a violation of securities regulations, the BSEC said.

Following the BSEC's letter, the share prices of most of the 60 companies rose, as investors grew optimistic that the firms would take steps to meet the capital requirement, according to insiders.

EBL Securities, in its daily market review, said the capital bourse extended its recovery mode as some easing of uncertainties on the country's political front, along with recent regulatory initiatives, prompted optimistic investors to take positions in equities and aided to somewhat regain investor confidence over the market's outlook.

The market maintained its upbeat vibe throughout the session with most scrips posting gains as buyers continue to dominate the trading board. Despite ongoing geopolitical tensions in the Middle East, investor optimism outweighed prevailing concerns, keeping market sentiment resilient, the review added.

On the sectoral front, food issues exerted the highest turnover, followed by bank and pharma sectors.

Lovello Ice Cream topped the turnover chart, followed by BRAC Bank, Beach Hatchery, and Agni Systems.

All the sectors displayed positive returns, out of which jute, IT and cement exhibited the most positive returns on the bourse.

Bay Leasing led the gainers, while Asia Pacific Insurance was the day's worst performer.

Meanwhile, the Chittagong Stock Exchange (CSE) also ended in the green. The CSCX gained 38 points, while the CASPI rose by 60 points.