Investors’ buying appetite pulls DSE index to seven-week high

The Dhaka Stock Exchange (DSE) experienced a notable surge, with its major index DSEX reaching a seven-week high in the first week of the current fiscal year, , fuelled by increased investor participation.

Over the outgoing week, increased buying interest, particularly in key sectors such as pharmaceuticals, banking, food, and fuel and power has driven this positive momentum.

The DSEX gained 142 points to reach 5,497, while the blue-chip DS30 rose 28 points to close at 1,951 over the last week.

During the four-day trading week, the index increased for three consecutive days, with the DSEX witnessing a record jump in the last trading session.

On the final day of the week, the DSEX surged by 123 points. That marked the highest single-day gain in two years, with the previous record being a 153-point increase on 31 July 2022.

The daily average turnover at the premier bourse jumped around 10% to Tk615 core against the previous week.

At those sessions, the market capitalisation of the DSE rose by around Tk9,000 crore to Tk6.71 lakh crore.

The port city bourse, the Chittagong Stock Exchange (CSE), also settled in the green terrain last week. The major indices of the Chattogram bourse, CSCX, gained by 2.51% to 9,315 points, and CASPI rose by 2.48% to 15,463 points.

EBL Securities said in its weekly market report said the capital market of the country showed signs of recovery as buyers continued their dominance across the trading floor owing to a slight rebound in investor sentiment, driven by positive expectations.

Buyers remained on the dominant side as opportunistic investors sought to take positions in particular scrips, which they deemed lucrative at the prevailing price levels, it added.

Shakil Rizvi, a director at the DSE, told TBS that investors subscribed over Tk2,400 crore from the secondary market in the Techno Drugs IPO. “After the IPO shares allocation, the company refunded the unused funds to the respective investors starting Thursday. A percentage of these refunded funds were reinvested in the market, contributing to the index’s gain.”

Ashequr Rahman, managing director of Midway Securities, said, “We were surprised to observe a significant amount of funds being tied up in the Techno Drugs IPO. This indicates that investors were eager for IPOs, regardless of whether they were fundamentally strong or not.” 

He added that the refunded amount from the latest IPO played a key role in the index’s rise.

On the sectoral front, pharma issues exerted the highest turnover, followed by food and textile sectors on the DSE.

Jamuna Oil was the top-traded stock with the average turnover value of Tk30 crore followed by Meghna Petroleum with Tk20 crore, Beach Hatchery with Tk14 crore and Orion Pharma with Tk12 crore.

All sectors displayed positive returns in the last week, with service and real estate gaining 9.16%, IT 8.218%, paper and printing 6.24%, and travel and leisure posting a 6.14% gain on the Dhaka bourse.

Aftab Auto topped the gainers’ table as its share price jumped by 21.36%, followed by Silco Pharma, RSRM Steel and Gemini Sea Food.

Capitec Grameen Bank Growth Mutual Fund was the worst, followed by Rupali Life Insurance, Atlas Bangladesh and Pragati Life Insurance.