Bank Stocks Lift Market, Prevent Broader Weekly Decline

Bangladesh’s capital market staged a modest recovery over the past week, with a rebound in banking shares playing a decisive role in preventing a broader downturn. After several consecutive weeks of weakness in the banking sector, renewed investor interest—fuelled largely by dividend expectations—helped stabilise the market and push key indices into positive territory.

At the Dhaka Stock Exchange (DSE), the benchmark DSEX index rose by 0.7%, gaining 38 points to close at 5,258, compared with 5,220 in the previous week. The blue-chip DS30 index also advanced by 22 points to reach 2,002, whilst the Shariah-compliant DSES index edged up by nearly 4 points to 1,063. These gains reflect a cautious but improving sentiment among investors following earlier volatility.

The week’s upward momentum was largely supported by strong performances in key banking stocks, including BRAC Bank, Pubali Bank, Prime Bank, and City Bank. Additionally, consumer sector players such as Taufika Foods and Lovello Ice Cream also contributed to the index’s rise. Analysts suggest that expectations of attractive dividend declarations encouraged buying interest in banking shares, offsetting weakness in other sectors.

Market Performance Snapshot (DSE)

Despite the overall index gains, market breadth remained negative. Of the 387 securities traded during the week, 138 advanced, whilst 220 declined and 29 remained unchanged. A further 24 securities saw no trading activity, highlighting lingering caution among investors.

Trading activity showed a marginal improvement, with average daily turnover rising slightly to BDT 669 crore, compared to BDT 668 crore in the preceding week. Although the increase was modest, it signals a degree of renewed participation in the market.

Market analysts noted that the week began on a subdued note, driven by uncertainty surrounding geopolitical tensions in the Middle East and domestic energy shortages. These concerns triggered widespread selling pressure. However, sentiment shifted markedly later in the week following reports of a ceasefire, prompting a sharp market rebound. The rally proved short-lived, as the final trading session saw some profit-taking and renewed caution due to uncertainties about the durability of the ceasefire.

Sector-wise Turnover Distribution (DSE)

The pharmaceuticals and chemicals sector dominated trading, accounting for 15.8% of total turnover, followed by engineering and banking sectors. This distribution underscores the continued importance of defensive and industrial sectors in maintaining liquidity.

In terms of sectoral returns, the leather sector posted the highest gain at 2.4%. Banking and paper & printing sectors each recorded gains of 1.7%, whilst information technology and cement sectors rose by 1.4% and 1.3% respectively. Conversely, mutual funds experienced the steepest decline, falling by 2.9%, followed by life insurance (-2.8%) and travel & leisure (-1.8%).

Meanwhile, the Chittagong Stock Exchange (CSE) also recorded gains. The CASPI index rose by 0.49% to 14,774 points, whilst the CSCX index increased by 0.63% to 9,039 points.

Market Performance Snapshot (CSE)

Trading activity at the CSE rose significantly, with total turnover reaching BDT 243 crore, up from BDT 188 crore the previous week. Of the 297 securities traded, 123 gained in value, whilst 144 declined and 30 remained unchanged.

Overall, the week’s performance reflects a fragile recovery in Bangladesh’s capital markets. Whilst banking stocks provided crucial support, broader investor sentiment remains sensitive to both domestic and international developments. Sustained stability in the coming weeks will likely depend on clearer economic signals, consistent corporate earnings, and easing geopolitical uncertainties.