Dhaka stocks hit 9-month high

Dhaka stocks extended their upward trend last week, reaching a nine-month high amid increased investor participation.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), surged 51.38 points, or 0.95 percent, to close the week at 5,443.42, its highest level since October 9 last year, when it stood at 5,422.06.

Market movement during the week was driven by positive changes in the market capitalisation of banking, pharmaceuticals and chemicals, and textile stocks.

Commenting on the rise, Shahidul Islam, chief executive officer of VIPB Asset Management, said the stock market was "massively" undervalued, so this is a natural rebound.

Since January 2024, the index had dropped by around 12 percent before the rebound. As a result, many stocks began attracting investors.

One of the reasons behind the index's recovery was macroeconomic development. "A solid development" was observed in the rising foreign exchange reserves, and pressure on the exchange rate has eased. Inflation has declined, and other economic indicators are also showing signs of recovery.

"This boosts investors' confidence," he said.

Most importantly, the interest rate on treasury bonds is on a downward trend, which has a direct inverse relationship with the stock market index, he explained.

Governance in the stock market has also improved, which is drawing prudent investors back into the market, Islam added.

Meanwhile, food and allied, fuel and power, and engineering sectors witnessed declines in market capitalisation, according to a weekly market review by Shana Securities.

The DS30, which tracks blue-chip stocks, advanced 1.18 percent to 2,114.35, while the DSES, which comprises Shariah-compliant firms, declined 0.18 percent to 1,170.61, according to DSE data.

Turnover, a key indicator of investor activity, totalled Tk 4,194.31 crore for the week, slightly down from Tk 4,297.23 crore of the previous week.

On a daily average, turnover stood at Tk 838.86 crore, down from Tk 859.44 crore.

Banking stocks dominated trading, accounting for 29.47 percent of the average daily traded value. Pharmaceuticals followed with 10.56 percent, while textile stocks made up 8.38 percent.

Sector-wise, textile stocks led the gains with a 4.03 percent rise. Banking, cement, and general insurance stocks also posted notable gains.

Despite the market's upward movement, market breadth was negative, as 140 scrips advanced, 222 declined, and 31 remained unchanged.

Among individual stocks, Rahima Food Corporation Limited emerged as the top gainer, soaring 21.24 percent, while Midland Bank PLC suffered the biggest drop, falling 20.56 percent during the week.