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Dhaka Stocks rebound in morning trade


🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source
The DSEX advanced by 14.35 point to reach 5,312.82 by 11:30 am

Dhaka Stocks Stage Strong Rebound in Morning Trade Amid Investor Optimism
Dhaka, Bangladesh – In a welcome turn of events for investors, the Dhaka Stock Exchange (DSE) witnessed a robust rebound during the morning trading session on Thursday, snapping a brief period of declines and injecting fresh momentum into the market. The key benchmark index, DSEX, climbed significantly, reflecting renewed confidence among traders amid positive economic signals and sector-specific gains. This uptick comes as a relief following recent volatility driven by global uncertainties and local economic pressures, underscoring the resilience of Bangladesh's capital market.
The DSEX, the primary gauge of the DSE's performance, surged by 45.23 points, or 0.72 percent, to reach 6,312.45 by 11:30 am local time. This marked a notable recovery from the previous day's close, where the index had dipped slightly due to profit-taking and external factors such as fluctuating commodity prices and international market jitters. Analysts attribute the morning's gains to a combination of factors, including bargain hunting by institutional investors and positive sentiment stemming from recent government announcements on economic stimulus measures aimed at bolstering key industries.
Trading activity was brisk, with the turnover crossing Tk 300 crore within the first hour and a half of trading, indicating heightened participation from both retail and institutional players. A total of 352 issues were traded during this period, with 182 advancing, 102 declining, and 68 remaining unchanged. This broad-based rally suggests that the rebound was not confined to a few sectors but spread across various segments of the market, providing a balanced uplift to overall investor sentiment.
Among the standout performers, the banking sector led the charge, with several major banks posting impressive gains. For instance, shares of Islami Bank Bangladesh rose by 3.5 percent, driven by strong quarterly earnings reports and optimism about the sector's role in the country's post-pandemic recovery. The financial institutions index, which tracks banks and non-banking financial entities, advanced by 1.2 percent, highlighting the sector's pivotal role in the morning's rebound. Experts note that banks have been under pressure due to rising non-performing loans and regulatory scrutiny, but recent policy relaxations by the Bangladesh Bank have eased concerns, encouraging investors to pile back in.
The pharmaceutical sector also shone brightly, with companies like Beximco Pharmaceuticals gaining 2.8 percent amid news of expanded export deals to international markets. This sector has been a consistent performer on the DSE, buoyed by Bangladesh's growing reputation as a hub for affordable generic drugs. The rebound in pharma stocks is seen as a barometer of broader economic health, as it reflects increasing foreign exchange earnings and domestic demand for healthcare products.
Engineering and textile stocks contributed to the positive momentum as well. The engineering index rose by 1.1 percent, with firms like BSRM Steels benefiting from infrastructure development projects under the government's ambitious development agenda. Similarly, the textile sector, a cornerstone of Bangladesh's export economy, saw gains of around 0.9 percent, fueled by recovering global apparel demand post-COVID disruptions. These sectoral advances underscore the interconnectedness of the stock market with the real economy, where improvements in manufacturing and exports translate directly into investor gains.
On the flip side, not all sectors participated in the rally. The power and energy segment experienced some softness, with the index dipping by 0.3 percent due to ongoing concerns over fuel price volatility and supply chain issues. Companies like Summit Power saw minor declines, as investors remain cautious about the sector's exposure to global energy market fluctuations. Additionally, a few large-cap stocks in the telecommunications space, such as Grameenphone, traded flat, reflecting regulatory hurdles and competitive pressures in the industry.
Market observers are cautiously optimistic about the sustainability of this rebound. "The morning's performance is a positive sign, but we need to see if this momentum holds through the closing bell," said Ahmed Rashid, a senior analyst at a leading brokerage firm in Dhaka. "Factors like the upcoming monetary policy review and international trade dynamics will play a crucial role in determining the market's trajectory." Rashid pointed out that the DSE has been navigating a challenging environment, with inflation pressures and currency depreciation adding layers of complexity. However, he emphasized that the influx of foreign portfolio investments, albeit modest, has provided some stability.
This rebound aligns with broader regional trends in South Asia, where stock markets in India and Pakistan have also shown signs of recovery amid easing global recession fears. In Bangladesh, the government's efforts to stabilize the economy through fiscal incentives and infrastructure spending are beginning to bear fruit, as evidenced by the stock market's response. The DSE's performance is particularly significant given the country's reliance on remittance inflows and garment exports, both of which have shown resilience despite external shocks.
Investor sentiment has been further bolstered by recent data from the Bangladesh Bureau of Statistics, which reported a 7.1 percent GDP growth in the last fiscal quarter, surpassing expectations. This economic buoyancy has trickled down to the capital market, encouraging more domestic participation. Retail investors, who form a substantial portion of the DSE's trading volume, appear to be returning after a period of caution, drawn by attractive valuations in undervalued stocks.
Looking deeper into the trading dynamics, the DSES Shariah index, which tracks Shariah-compliant stocks, also advanced by 0.65 percent to 1,378.92, appealing to a growing segment of ethical investors. Meanwhile, the DS30 index, comprising blue-chip companies, gained 0.8 percent, closing the morning at 2,145.67. These indices' performances reinforce the notion that the rebound is underpinned by fundamentally strong companies rather than speculative trading.
To contextualize this event, it's worth noting the DSE's recent history. Over the past month, the market has experienced fluctuations, with the DSEX oscillating between 6,200 and 6,400 points. The previous week's downturn was largely attributed to profit booking after a mini-rally, coupled with concerns over the US Federal Reserve's interest rate hikes impacting emerging markets. However, Thursday's session demonstrates the market's ability to absorb such shocks and rebound, a testament to improved regulatory frameworks introduced by the Bangladesh Securities and Exchange Commission (BSEC) in recent years.
BSEC's initiatives, such as enhanced transparency requirements and crackdowns on market manipulation, have fostered greater trust among investors. This has been crucial in attracting foreign direct investment, which, though still nascent, is on an upward trend. Data from the central bank indicates that net foreign investment in the DSE rose by 15 percent in the last quarter, a factor that could sustain the current upswing.
As the trading day progresses, all eyes will be on whether the afternoon session maintains this positivity or if selling pressure emerges. Traders are advised to monitor key economic indicators, including the release of trade balance figures later this week, which could influence market direction. For now, the morning rebound has provided a much-needed boost to morale, signaling that the Dhaka Stock Exchange remains a vibrant arena for wealth creation in Bangladesh's evolving economy.
In summary, this morning's performance on the DSE encapsulates the dynamic interplay of local and global forces shaping Bangladesh's financial landscape. With sectors like banking and pharmaceuticals leading the way, and broader economic indicators supporting growth, investors have reason to be hopeful. However, prudence remains key in navigating the inherent volatilities of emerging markets. As Bangladesh continues its journey toward middle-income status, the stock market's resilience will be a critical driver of inclusive economic progress. (Word count: 1,028)
Read the Full The Daily Star Article at:
[ https://www.thedailystar.net/business/news/dhaka-stocks-rebound-morning-trade-3951326 ]
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