DSEX jumps 3.77% amid political optimism

The beaten down Dhaka Stock Exchange, on its first opening bell since the political regime change in Bangladesh, witnessed a sharp jump today.

The DSEX, the broad-based index of DSE, surged by 3.77%, closing 197.2 points higher at 5,426, marking its biggest increase since 3 January.

At the opening bell, the market reflected strong optimism, as indices started with a significant upward gap. The energetic trading continued throughout the session, leading to the notable rise.

This was the most robust opening in the past three to four years.

Stock brokers and analysts said investors' sentiments changed overnight after Sheikh Hasina resigned and fled the country on 5 August, and now they await an interim government, likely to be led by Nobel laureate Dr Muhammad Yunus.

According to them, during the ruling period of the ousted regime, stock investors were feeling suffocated by unprecedented market interferences alongside a continuously deteriorating governance. It kept cornering the ethical, compliant market players and empowered manipulators and corrupt players.

Investors and market professionals now expect liberal rules, regulations alongside the much needed rule of law from the upcoming government.

If Muhammad Yunus, a friend of the developed world's democratic block, ascended to the top of the interim government it would promote good governance and the much needed economic, financial reforms, they expected.

EBL Securities, a top tier brokerage firm, in its daily market commentary said, "The capital market of the country experienced a strong rebound as buyers turned back to take positions in equities owing to a sense of optimism regarding a positive shift of the market's momentum following the recent developments in the country's political landscape."

"The indices remained elevated right from the start of the day's session as buyers remained predominant across the trading floor, causing most of the scrips to witness price appreciation," it added.

A CEO of a top tier brokerage firm told TBS that well-governed compliant companies were suffering a prolonged depression in the secondary market and investors opted for their shares eying a better corporate performance and higher dividends in the coming days.

He also hoped for a fair regulatory environment in the country.

Meanwhile, the blue chip index DS30 outperformed the broad-based index rising by 4.1% to 1,935.

Grameenphone, the largest listed company in Bangladesh, hit the top circuit at the opening and closed there as there had been no interested seller even at the spiked up price.

On 4 August Grameenphone shares hit the bottom circuit of 3% at Tk247.2 apiece and the regime change pushed it to Tk268.8, an 8.7% rise.

Analysts said, the best performing mobile phone operator was facing regulatory adversity during the prolonged Awami League regime, widely believed to be a part of Hasina's clash with Yunus and the political landscape change should offer the company a breathing space in terms of regulatory treatment.

Also Robi Axiata shares rose by 10% to the highest allowable price of Tk25.3 apiece for the day. 

During the volatile days amid student protests over the past few weeks, most of the stocks were hitting the narrowed down lower circuit that doesn't allow a fall bigger than 3% a day.

Today, over 100 shares hit their top circuits which allow prices to go up by up to 10% a day.

Meanwhile, market turnover in the DSE increased by 260.9% to Tk750 crore.

On the sectoral front, the banking sector contributed to the highest 24% of the DSE turnover, followed by pharmaceuticals and food sectors.

All the sectors, except Jute, displayed positive returns.

Telecommunications led with a massive 9.1% surge in market capitalisation, followed by non-bank financial institutions and ceramic.

Out of the 397 scrips traded, 327 advanced, 58 declined and 12 remained unchanged.

The Chittagong Stock Exchange registered a 179% rise in daily turnover as it increased to Tk9.3 crore from Tk3.3 crore.

CSCX, the broad-based index of the port city bourse rose by 3.2% to 9,279.

Analysts, however, cautioned their clients about the prevailing macroeconomic challenges that the next government must address to achieve Bangladesh's long-term economic goals.