The reaction seen in the country’s capital market after the announcement of the 13th national election results is being considered one of the biggest surges in recent times.
On the first trading day (Sunday) after the election, the strong jump in the index at the Dhaka Stock Exchange (DSE), the sharp increase in turnover, and the upward trend in share prices of most companies proved how quickly the capital market can respond positively when political uncertainty recedes.
At the end of the day, the benchmark DSEX index rose to 5,600.65 points. Compared to the previous trading day, the index increased by 200.72 points, or 3.71%.
The second index, DSES, rose by more than 30 points, while the DS30 index, comprising the top 30 companies, gained 86 points.
Such a broad-based rise in a single day has not been seen in recent months.
Highest turnover in five months
Not only the index, but trading activity also regained momentum. Total turnover at the DSE exceeded Tk1,275 crore at the end of the day.
On the previous trading day, turnover was around Tk790 crore, meaning an increase of nearly Tk485 crore in a single day.
This was the highest turnover since September 8 last year.
Market analysts said this surge in turnover proves that not only did prices rise, but active participation in the market also increased.
This indicates that the rise was not artificial or driven by a limited group, but reflected broad-based participation.
Market capitalization also increased by about Tk12,305 crore in a single day. It rose from Tk708,977 crore on the previous trading day to Tk721,282 crore at the end of the day.
This increase signals a positive impact on the overall valuation of the country’s corporate sector.
Expectations
The Bangladesh Nationalist Party (BNP) secured an absolute victory in the election. The party is led by Tarique Rahman. Its election manifesto promised economic reforms, good governance in the banking sector, anti-corruption measures, an investment-friendly environment, and increased employment.
Market participants said the peaceful completion of the election and the likelihood of swift government formation have created new confidence among investors.
Before the election, prolonged stagnation persisted in the market due to political uncertainty, high interest rates, liquidity shortages, instability in the dollar market, and weaknesses in the banking sector.
Many investors had stayed on the sidelines to avoid risk.
After the announcement of the results, they began repositioning themselves in the market. Those who had been waiting for a long time viewed this as an entry point.
Sector-wise analysis
During the day’s trading, shares of banks, financial institutions, insurance companies, and large-cap firms saw the strongest buying pressure.
The banking sector effectively pulled the market upward.
City Bank topped the turnover list, followed by Dhaka Bank and Square Pharmaceuticals. BRAC Bank, Bangladesh Shipping Corporation, Robi, Saiham Cotton, Jamuna Bank, Islami Bank, and Orion Infusion also recorded notable trading.
In terms of price gains, One Bank, Munno Fabrics, LankaBangla Finance, Asia Insurance, and Daffodil Computers led the list. Most of their share prices rose between 9 and 10 percent, the maximum daily limit. Shares of nearly 75 companies hit circuit breakers.
Out of 364 companies, share and unit prices increased, while only 26 declined. Prices of four remained unchanged. Even a large portion of Z-category companies (non-dividend paying firms) saw their share prices rise, indicating an overall positive market sentiment.
Positive momentum in CTG as well
The same trend was seen at the Chittagong Stock Exchange.
The overall index CASPI rose by about 484 points. Turnover increased to Tk24.65 crore, nearly two and a half times higher than the previous day.
‘Relief rally’
Some market analysts described the surge as a “relief rally.” Such sharp increases are often seen as a reaction of relief after prolonged political uncertainty and policy ambiguity.
However, they cautioned that structural reforms are essential to sustain this momentum.
Key challenges include controlling default loans in the banking sector, resolving liquidity shortages, ensuring stability in interest rate policy, maintaining balance in the dollar market, strengthening corporate governance, increasing institutional investment, and bringing quality IPOs to the market.
DSE officials said the government must take visible reform measures quickly to sustain the positive momentum.
Strict action to stop bank looting and ensure transparency in the financial sector is especially necessary.
Reflection of expectations, but with caution
According to analysts, the message of political stability through a peaceful election has positively influenced investor confidence.
However, sustained growth will require economic reforms, transparency in interest rate policy, stability in the dollar market, and effective steps to increase institutional investment.
DSE director Md Shakil Rizvi said investor confidence has returned as there was no major violence surrounding the election. To maintain this positive trend, it is essential to bring IPOs of good companies and ensure governance in the market.
DBA president Saiful Islam said stability would return if the new government fulfills its promises regarding the stock market. Quick reform initiatives are necessary to restore investor confidence.
Macroeconomic context
The capital market does not move solely on political signals; it also reflects macroeconomic realities.
Currently, challenges include high inflation, pressure on foreign exchange reserves, import restrictions, and stagnation in private sector investment.
If the new government quickly announces policies for an investment-friendly budget, expansion of industrial production, and export growth, the foundation of confidence in the capital market will strengthen further.
The strong reaction in the capital market on the first trading day after the election undoubtedly carries a positive message. The day’s trading proved that investors become active quickly once political uncertainty subsides.
However, sustained growth will require consistent policies, good governance, and economic reforms.
Attention will now focus on how quickly the new government implements its promised reforms and how effectively it integrates the capital market into the economic mainstream.
