Blue-chip gains lift Dhaka stocks to 10-month high

The benchmark index of Dhaka Stock Exchange (DSE) climbed to a 10-month high on the first trading day of the week, buoyed by gains in blue-chip shares and improved investor sentiment amid signs of macroeconomic recovery.

Yesterday, the DSEX index rose 92.72 points, or 1.70 percent, to close at 5,536, its highest level since October 1 last year when it ended at 5,586. It marked the third consecutive session of gains.

The other indices also showcased a positive performance before the end of the day's trade.

The Shariah-compliant DSES index went up 1.96 percent to 1,193. The DS30, which tracks blue-chip stocks, gained 1.70 percent to close at 2,150.

Turnover on the DSE rose to Tk 1,137.40 crore, up from Tk 1,063.39 crore in the previous session.

"The market was massively undervalued, so this is a natural rebound," said Shahidul Islam, CEO of VIPB Asset Management. "The index had dropped about 12 percent since January, making many stocks attractive."

Improving macroeconomic indicators have also helped lift sentiment, Islam added.

He noted that the pressure on the exchange rate has dropped as foreign exchange reserves are rising. At the same time, inflation has dropped, and other economic indicators are also showing signs of recovery. "These developments are boosting investor confidence,"

"Most importantly, the interest rate of treasury bonds is on a downward trend, and this is inversely proportional to the stock market index," he said.

There have also been improvements in the stock market's governance in the stock market, which was influencing sound investors into parking their funds in the market, Islam added.

Stocks of companies with a good performance record, such as those of Brac Bank, Bangladesh Submarine Cables, Square Pharmaceuticals, and British American Tobacco, played a part in raising the index.

A total of 264,502 trades were executed, while block transactions amounted to Tk 33.79 crore across 38 scrips.

Market breadth was in the positive, with 218 stocks advancing, 122 declining, and 58 remaining unchanged.

Among A-category scrips, 142 made gains, 54 suffered losses, and 23 remained unchanged.

In the B-category, 42 stocks rose and 33 fell, while there was no activity in the N-category.

The segment-wise performance was somewhat mixed. Among mutual funds, 18 issues advanced and 8 declined.

Corporate bonds saw the advance of just one issue, while the government bond market saw one issue advance as well.

Among individual performers, Standard Bank topped the gainers' list with a 10 percent surge, while SEML Lecture Equity Management Fund was the worst performer, dropping 9 percent.