Dhaka stocks witnessed a sharp rise in its indices in the past week, as a section of optimistic investors increased their activity across the trading board, after resumption of trading following the Eid-ul-Azha holidays.
DSEX, the key index of the Dhaka Stock Exchange, increased by 126.31 points in the past week, to end at 5,244.12 points. This was preceded by a drop of 119.51 points in the previous week.
In the past week, the Dhaka bourse operated on only two sessions, as the bourse remained close from June 14 to June 18 for weekly holidays and on the occasion of Eid-ul-Azha. Both sessions witnessed gain in the indices.
Eid-ul-Azha, one of the biggest religious festivals of the Muslims, was celebrated in the country on June 17.
Over the past 18 weeks, the market has risen only four times, including the past week, and has fallen in the other 14 weeks.
The Dhaka bourse posted its lowest turnover in nearly 16 months on June 19 in the past week, which was the day trading on the bourse resumed.
The total turnover on the DSE in the past week was Tk聽699.38 crore, which was Tk聽1,882.27 crore in the previous week.
Market operators said that the market saw a rise as prices of most of the shares reached at its lowest point, due to the recent correction on the market.
Buyers took the chance to make profits from the low priced shares and injected new funds into the market, they said.
They mentioned that investors were feeling down in the previous weeks as they were unhappy with the new budget measures related to the capital market.
On June 6, finance minister Abul Hassan Mahmood Ali presented the proposed budget for the 2024-25 financial year at the Jatiya Sangsad in Dhaka. In this budget, the minister suggested a capital gain tax on individual investors if their profits go over Tk 50 lakh.
The total market capitalisation stood at Tk 6,43,649.85 crore on June 20, the last trading session in the past week, which was Tk 6,46,186.64 on June 5, before the placement of the budget proposal.
Market experts pointed out that investors were worried due to the increasing economic concerns in the country, including the continuous decline in the country鈥檚 foreign exchange reserves.
According to Bangladesh Bank data, foreign investments in the country鈥檚 capital market halved over the last two years.
The central bank reported that total foreign investments in the capital market were $1,084.63 million at the end of 2023 compared with those of $1,925.10 million at the end of December 2021.
Market experts mentioned that the Bangladesh Bank鈥檚 decision to raise repo rates, which could lead to higher interest rates, impacted the investors negatively. This might cause investors to move their money to banks instead.
Additionally, the devaluation of the taka against the US dollar made the market situation worse.
The DSE Shariah index increased by 37.99 points, to close at 1,146.05 points, in the past week.
The DS30 index gained 53.58 points, to finish at 1,875.47 points.