Turnover hits one-year high as Dhaka stocks extend rally

The Dhaka Stock Exchange (DSE) witnessed a surge in investor activity today, with its turnover climbing to its highest level in a year, reflecting renewed investor confidence amid easing macroeconomic pressures and improving policy signals.

Turnover, a key indicator of market participation, jumped by 9.35% from the previous session to reach Tk1,397 crore. This marks the highest daily turnover since 11 August 2024, when the trading value peaked at Tk2,010 crore.

Analysts and fund managers describe the development as a significant sign of investors re-entering the market with optimism, buoyed by stabilising economic indicators.

The bank stocks dominated trading activity, accounting for 16.4% of the day's turnover. The pharmaceutical stocks followed with 13.5%, while textile issues contributed 9.9%.

Among individual securities, City Bank emerged as the top turnover leader with Tk69.87 crore, followed by Orion Infusion at Tk50.93 crore. Eastern Bank, Khan Brothers PP Woven Bag, and Jamuna Bank also featured prominently in the turnover chart, collectively reflecting a growing appetite for both financial and manufacturing sector shares.

A managing director of an asset management company told TBS that the rally reflects a rare alignment of macroeconomic and policy factors that are restoring confidence to the market.

"The government's determination to hold national elections by February, rising forex reserves, and a gradual easing of monetary conditions are collectively reviving risk appetite," he said. 

The asset management company managing director further noted that declining government treasury yields and Bangladesh Bank's recent decision to lower the reverse repo rate by 50 basis points to 8% have encouraged institutional investors to shift funds into equities.

"With fixed-income returns becoming less attractive, the stock market is increasingly seen as a viable alternative for generating returns," he added.

The benchmark DSEX index extended its rally for a second consecutive session today, gaining 10 points to settle at 5,631, its highest level in 11 months. The last time the index stood at a comparable level was on 29 September 2024, when it closed at 5,658 points. The blue-chip DS30 index rose marginally by 0.72 points to finish at 2,195, while the shariah-based DSES index inched up 0.54 points to 1,233.

Investor sentiment remained cautiously upbeat, with 184 issues advancing against 165 declining, while 47 remained unchanged.

Over the past two trading days, the market's total capitalisation increased by Tk2,300 crore, underscoring the positive shift in momentum.

EBL Securities, in its daily market review, said the bourse sustained its rebound momentum with heightened market participation as investors focused on large-cap scrips. 

"The market maintained a mildly positive tone throughout the session, primarily riding on price appreciation in particular bank stocks, while profit booking pressure kept the rally in check," it noted.

The sectoral performance painted a mixed picture. Ceramic stocks rose the most, advancing by 3.4%, followed by mutual funds at 2.2% and non-bank financial institutions at 1.8%. On the flip side, travel services slid 1.4%, the broader services sector dropped 1.1%, and engineering declined 0.6%.

Among the day's top gainers were Intech, which surged by 9.86%, Zahintex Industries rising by 9.09%, and Nurani Dyeing gaining by 8%. BDCOM Online and Golden Son also advanced by 7.89% and 7.31%, respectively.

Conversely, HR Textile, which was downgraded to the "Z" category earlier in the day, topped the losers' list with a 10% drop, hitting its circuit breaker limit. Fareast Finance and FAS Finance both fell 5.88%, while Samata Leather and Information Service Network shed 4.95% and 4.92%, respectively.

The upbeat mood was also reflected in the Chattogram Stock Exchange (CSE), where indices closed higher with increased turnover. The CSCX index gained 53 points to reach 9,671, and the CASPI index jumped 78 points to 15,731. Turnover on the port city bourse surged 43% to Tk21.11 crore.