DSE index rebounds, surges 100 points after 3-day decline

Infographic: TBS

Stocks rebounded today (9 October), breaking a three-session downward trend as the major index of the Dhaka bourse surged by around 100 points.

This increase signals a significant recovery in investor confidence amid previously weakened market sentiment, according to market insiders.

On the day, the benchmark DSEX index of the Dhaka Stock Exchange (DSE) surged by 98 points, or 1.85%, closing at 5,422. Meanwhile, the blue-chip index DS30 rose by 45 points, or 2.36%, to finish at 1,984.

Among the traded stocks, 83% advanced, while 9% declined and 8% remained unchanged.

The market capitalisation of the Dhaka bourse surged by Tk8,115 crore to reach Tk6.74 lakh crore.

The EBL Securities said in its daily market commentary, the capital bourse showed signs of recovery following a prolonged bearish vibe as bargain hunters chose to take positions in the beaten-down scrips in anticipation of quick gains, although overall market confidence has yet to restore across the trading floor.

The market remained upbeat right from the start of the session, while a dominant buying spree in the latter half of the session pushed the broad index up by more than 100 points, it said.

Akramul Alam, head of Research at Royal Capital, told The Business Standard that there were no fundamental reasons behind the sudden surge in the index.

Most stocks had declined due to a prolonged bearish trend, prompting some investors to capitalize on lower prices by buying undervalued stocks. This strategy contributed to the index's upward movement, he added.

Mohammad Rehan Kabir, head of Research at EBL Securities, told TBS that the Bangladesh Securities and Exchange Commission (BSEC) has formed a task force to reform the capital market. This initiative has raised investor expectations and fostered a positive outlook.

On 7 October, the BSEC formed a five-member taskforce to get recommendations for the needed reforms in the capital market.

The purpose of the taskforce includes the overall development of the capital market, boosting investors' confidence and taking the capital market governance to the international level, the BSEC said in its order.

Rehan Kabir said, as the indices continue to decline, retail investors are demanding reform in the stock market. In response, the BSEC held a meeting on Wednesday with representatives of the concerned investors to discuss their demands. This engagement has fostered positive sentiment among investors, positively impacting the index.

The BSEC said in a press release, the commission has met with the general investors to know their demands for reforming the capital market.

In response to investors' demand, the commission said, the BSEC will regularly engage in discussions with relevant ministries, law enforcement agencies, regulatory bodies, and other key associations and chambers related to the capital market.

As part of the ongoing reform process, the BSEC aims to establish a transparent and thriving capital market by incorporating input and participation from all stakeholders invested in the country's financial landscape, added the BSEC.

Meanwhile, market participation remained sluggish, with total turnover slightly increasing by 6% to Tk376 crore as against Tk355 crore in the previous session.

On the sectoral front, the banking sector accounted for the highest contribution to total turnover at 19.7%, followed by IT at 16.8% and the pharmaceuticals sector at 14.3%.

All the sectors displayed positive returns, out of which non-bank financial institutions, IT and food exhibited the most positive returns on the Dhaka bourse.

Investment Corporation of Bangladesh topped the list of gainers, with a 10% increase in its share price to Tk64.9 each, followed by BDCOM Online Limited with a 9.90% rise to Tk24.4, and Agni Systems, which gained 9.57% to reach Tk41.2.

Meanwhile, Newline Clothing led the losers' list as its share price fell by 9.87% to Tk21.9 each, followed by Runner Automobiles, which dropped 7.55% to Tk20.8, and Apex Tannery, down 6.29% to Tk83.3.