Large-cap stocks drive market recovery

Staff Reporter :

The benchmark index of the capital markets rebounded to a positive trend last week (ending Thursday) as bargain hunters showed renewed buying interest.

Following a series of corrections in the previous week, optimism was somewhat restored by the Investment Corporation of Bangladesh (ICB) securing a Tk 3,000 crore sovereign-guaranteed loan, significantly aiding the market’s recovery.

Market analysts attributed the rebound largely to state-run ICB’s injection of funds into the market.

However, cautious investors remain watchful of the sustainability of this short-lived recovery amid a lack of major triggers to stabilise the volatile market.

During the week, out of the companies traded on the Dhaka Stock Exchange (DSE), 172 experienced price increases, 168 saw price decreases, and 57 remained unchanged.

While the price movements were almost evenly distributed, the market capitalisation of large-cap companies increased as their share prices rose.

The DSEX, the broad index of the DSE, gained 116.1 points (2.3 per cent), settling at 5,221.57 points. Investor participation rose by 15.8 per cent to Tk 373.1 crore, compared to Tk 322.2 crore in the prior week.

The DS30 index, which tracks 30 prominent companies, increased by 56 points to 1,938.29 points, while the DSES index, representing Shariah-compliant companies, rose by 27 points to 1,167.35 points.

Investors were most active in the pharmaceutical sector (24.5 per cent), followed by textiles (11.6 per cent) and banks (9.3 per cent). All sectors, except financial institutions (-1.0 per cent) and mutual funds (0.4 per cent), ended the week in positive territory, with the telecom sector being the highest gainer at 4.7 per cent.

The Chittagong Stock Exchange (CSE) also mirrored the DSE’s gains, with the CSE All Share Price Index (CASPI) rising by 218 points to 14,522, and the Selective Categories Index (CSCX) increasing by 141 points to 8,843. Investors in the port city traded 1.41 crore shares and mutual fund units, with a turnover value of Tk 45.9 crore.

The central bank disbursed the ICB fund at a 4 per cent interest rate for 18 months, backed by a government sovereign guarantee aimed at bolstering the struggling market.

“We have already begun injecting the fund into the market, particularly in high-quality stocks,” said Md Abul Hossain, Managing Director of ICB.
Dr M. Mashrur Reaz, Chairman of Policy Exchange Bangladesh, noted that macroeconomic indicators are showing signs of recovery, which has boosted investor confidence in the capital market.

Finance Adviser Salehuddin Ahmed called on market players and regulators to take greater responsibility for the ongoing challenges in the capital markets, urging them to enhance public awareness through broader outreach efforts.