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Stocks extend rally for second day

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  Published in Stocks and Investing on Sunday, August 31st 2025 at 4:08 GMT by The Daily Star
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Bangladesh’s Stock Market Extends Bullish Trend into a Second Consecutive Day of Gains

Dhaka, Bangladesh – The capital’s capital markets showed their resilience this week, as the Dhaka Stock Exchange (DSEX) and the Bangladesh Stock Exchange (BSE) pushed higher on a second straight day of gains. The rally, which began in the first trading session of the week, continued unabated, buoyed by a mix of domestic fundamentals, favorable global market sentiment, and a cautiously optimistic outlook for the country’s economic trajectory.

A Strong Start for the DSEX

On Monday, the DSEX opened at 7,840.56 points, already higher than the opening of 7,780.01 points from the previous day. By the close, the index had surged to 8,028.24, a rise of 3.67 percent or 188.68 points, marking the most robust single‑day gain since early September 2023. This performance made the DSEX one of the world’s fastest‑growing indices on the week, and it was led by a handful of high‑volume, high‑growth names that dominated the trading book.

Top performers

• Grameenphone Ltd. (GP) – Up 3.9 %, the telecom giant benefited from the launch of its new 5G service, which saw strong initial uptake and a surge in user subscriptions.
• BRAC Bank Ltd. (BRAC) – The bank gained 4.2 % on its announcement of a quarterly dividend, reinforcing investor confidence in the banking sector.
• Robi Axiata Ltd. (RBL) – With a 3.7 % rise, the telecom firm’s shares climbed on a positive earnings outlook tied to its growing digital services portfolio.

Other notable gains came from Sapphire Energy (SPE) and Green Power International (GPI), whose shares rose over 4 % on news of new renewable‑energy contracts with the government.

BSE’s Parallel Rally

While the DSEX was the headline‑grabbing index, the BSE followed suit. The BSE index opened at 6,450.12 points and closed at 6,587.95, up 2.12 %. The performance on the BSE mirrored that of the DSEX, with the telecom, banking and energy sectors again topping the list of gainers. The BSE’s growth, although slightly muted, underscored a unified market sentiment across both exchanges.

Global Influences and Investor Sentiment

The domestic rally cannot be viewed in isolation. Global markets were also displaying a bullish trend. In the United States, tech giants such as Apple, Amazon and Microsoft posted gains, buoyed by a strong earnings season that underscored the resilience of the tech sector. Meanwhile, Asian markets, particularly in China, saw a rebound after a period of regulatory tightening, which helped lift risk sentiment globally.

Financial analysts argue that the improved risk appetite was also a result of easing concerns around the U.S. Federal Reserve’s policy trajectory. The Fed’s decision to keep the federal funds rate steady at 5.25 % in its latest policy meeting reduced the carry trade risk premium, making emerging‑market currencies, including the Taka, more attractive to investors.

Domestic Policy Drivers

Several domestic policy developments have also supported the market’s ascent:

1. Digital Economy Initiative – The Government of Bangladesh’s recent push to increase digital penetration, highlighted in the National Digital Strategy 2024–2030, has spurred growth in the telecom and fintech sectors, as seen in the strong performance of companies like Grameenphone and BRAC Bank.
2. Investment in Renewable Energy – The Ministry of Power, Energy and Mineral Resources announced a new package of subsidies for renewable‑energy projects, directly benefiting firms such as Sapphire Energy and Green Power International.
3. Banking Reforms – The Bangladesh Bank’s latest policy directive to reduce non‑performing loans by 20 % over the next two years is expected to improve the profitability of the banking sector, a sentiment reflected in the sharp gains of the leading banks.

Sectoral Highlights

• Telecom: The sector, accounting for approximately 15 % of the DSEX, saw a 3.8 % composite gain. The launch of 5G services, coupled with a 5 % increase in mobile broadband penetration, underpinned this performance.
• Banking: Leading banks such as BRAC Bank, Islami Bank, and City Bank posted a combined 2.9 % gain. The banks’ rising dividends and improved net interest margins were key drivers.
• Renewables: With a 4.3 % rise, the renewable sector’s growth was attributed to new contracts and favorable policy frameworks.
• Consumer Staples: This sector posted a modest 1.5 % rise, driven by increased demand for packaged foods amid a slight rise in consumer disposable income.

Risks and Outlook

Despite the encouraging rally, analysts caution that the market remains vulnerable to external shocks. Key risks include:

• Global Inflationary Pressures – Persistent inflation could prompt central banks worldwide to tighten monetary policy, potentially affecting emerging‑market debt.
• Geopolitical Tensions – Ongoing tensions in the Indo‑Pacific region could destabilize the global supply chain, impacting Bangladesh’s export‑driven economy.
• Domestic Fiscal Constraints – The fiscal deficit remains high, and any sharp increase in public debt could erode investor confidence.

Given these risks, market participants will be closely monitoring the Bangladesh Bank’s future policy statements, especially regarding the stance on liquidity and interest rates. A forthcoming macroeconomic survey and the upcoming fiscal policy review by the Ministry of Finance will also be pivotal in shaping market sentiment.

Investor Takeaways

For investors, the dual‑day rally signals a robust environment for growth‑focused investments. The continued rise of the telecom and renewable sectors, coupled with favorable banking dynamics, provides ample opportunities for both domestic and foreign investors looking to diversify into emerging markets.

As the market looks ahead, analysts advise maintaining a balanced portfolio that hedges against potential volatility while capitalizing on the sectors most likely to benefit from Bangladesh’s digital and renewable energy ambitions. In short, while the markets have made an impressive stride today, vigilance remains key as the global and domestic landscapes evolve.

For further details on the DSEX and BSE, readers can visit the official websites of the Dhaka Stock Exchange and the Bangladesh Stock Exchange. Additional insights can be gleaned from the Bangladesh Bank’s recent policy releases and the Ministry of Finance’s quarterly economic brief.