Dhaka stocks rebound in early trade

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  Published in Stocks and Investing on Tuesday, November 4th 2025 at 2:03 GMT by The Daily Star

Dhaka Stock Exchange Rebounds in Early Trade, Sending Investor Sentiment Back on Track

The Dhaka Stock Exchange (DSE) began the trading session on a positive note, with its main benchmark index posting a robust gain in the first half of the day. The upward swing was driven by a combination of domestic confidence, favourable policy signals, and a broader rally in regional equities. Analysts say the rebound signals a possible easing of the bearish trend that had characterised the market in recent weeks.

A Strong Opening for the DSE Index

In the first 30 minutes of trading, the DSE Composite Index surged by 1.6%, climbing to 7,650 points, its highest level in nearly a month. The index rose further to 7,720 points by the end of the morning session, marking a cumulative gain of 2.3%. Major bank stocks were the primary contributors to the rally. BRAC Bank (BRAC), Islami Bank Bangladesh (ISL), and Bangladesh Commercial Bank (BCB) each advanced by more than 3%. Utility shares such as Bangladesh Petroleum (BANGP) and Bangladesh Gas (BDGAS) also posted gains, while consumer staples like Grameenphone (GP) and Coca-Cola Bangladesh (COCA) moved higher, reflecting a broader market-wide uplift.

Factors Behind the Early Trade Surge

1. Positive Monetary Policy Outlook
   The Bangladesh Bank’s recent statement on its monetary policy framework provided a clear signal of a more accommodative stance. While the central bank had held the policy rate steady at 6.75%, its forward guidance hinted at a gradual easing of liquidity conditions. This expectation encouraged equity investors to seek higher returns in the market, boosting the overall sentiment.

2. Economic Data and Growth Prospects
   The International Monetary Fund’s (IMF) latest assessment of Bangladesh’s economy painted a cautiously optimistic picture. The country is projected to grow by 7.8% in 2025, driven by strong export demand and a growing domestic consumption base. The DSE’s early rally was partially attributed to the positive expectations surrounding the growth trajectory, as investors anticipate higher corporate earnings.

3. Regional Momentum
   The performance of neighbouring markets—India’s Nifty 50 and the Philippine Stock Exchange—sent a spillover effect to the DSE. Both markets posted gains earlier in the day, signalling a wider regional recovery that reassured Bangladeshi traders.

4. Corporate Performance and Earnings Forecasts
   Several listed companies had recently released earnings forecasts or announced dividends that surpassed market expectations. Notably, Square Pharmaceuticals (SQUARE) announced a 10% rise in its quarterly earnings, while Grameenphone revealed a 12% increase in its dividend payout. These corporate updates contributed to the market’s buoyancy.

Market Outlook and Analyst Sentiments

While the early trade rebound is encouraging, many analysts remain cautious. “The market has been highly volatile, and while the current gains are noteworthy, we need to watch the macroeconomic backdrop closely,” said Farah Azam, chief analyst at APEX Capital. She added that the central bank’s policy rate will likely stay steady in the short term but may lean towards easing in the near future if inflation pressures ease.

Other commentators highlight the importance of political stability, particularly as Bangladesh approaches its national elections in 2026. “Political uncertainty can significantly affect market confidence,” notes Sajal Hossain, a senior economist at Bangladesh Bank. He stresses that investors should adopt a risk‑averse stance until the political climate stabilises.

Broader Economic Implications

A stronger DSE can have several positive implications for Bangladesh’s economy:

• Foreign Direct Investment (FDI) Attraction – A rising stock market tends to signal a healthy investment environment, encouraging foreign capital inflows.
• Corporate Borrowing Costs – Equity gains may lower the cost of capital for companies, allowing them to fund expansions and innovations more affordably.
• Banking Sector Health – Stronger banks benefit from a positive asset environment, improving their balance sheets and enabling them to lend more generously.

The recent rebound also aligns with the Bangladesh Stock Exchange’s ongoing reforms, which include a push for higher transparency and tighter corporate governance standards. Such reforms are expected to increase investor confidence, especially among institutional participants.

Looking Ahead

The DSE is expected to continue trading on a bullish trajectory, provided the global economic environment remains stable and domestic policy signals stay supportive. Key watchpoints for the market include:

• The next set of macroeconomic releases, particularly inflation data and trade balance figures.
• Any changes in the central bank’s policy stance following the upcoming monetary policy meeting.
• Developments in the political arena leading up to the 2026 elections.

Investors should keep an eye on these indicators and adjust their portfolios accordingly. For now, the early trade rebound provides a constructive backdrop for market participants, suggesting that the DSE may be poised for a sustained recovery.