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The benchmark index of the Dhaka Stock Exchange (DSE) climbed above the 5,800-point mark for the first time in nearly two years, extending gains for a second consecutive week as investors responded positively to capital market reforms and supportive fiscal measures.

The DSEX rose 60 points, or 1.05 per cent, to close at 5,804, its highest level since September 2, 2024.

Market analysts said improving macroeconomic indicators, political stability, stronger foreign exchange reserves and the government’s renewed focus on capital market development helped restore investor confidence after a prolonged period of subdued trading.

The market started the week on a strong footing with broad-based buying of fundamentally sound stocks. Although profit-taking in blue-chip shares triggered a brief correction midweek, selective buying limited the downside.

Of the five trading sessions, the market advanced in three and declined marginally in two.

According to EBL Securities, the Prime Minister’s remarks on capital market development and expectations of revisions to margin lending rules encouraged broad-based buying during the week.

Akramul Alam, Head of Research at Royal Capital, said supportive fiscal policies and ongoing regulatory reforms had created a more favourable investment environment.

“The market remained undervalued for a long time, so investors are gradually regaining confidence to invest in stocks.”

He said investor sentiment had improved further since renowned chartered accountant Masud Khan took over as chairman of the Bangladesh Securities and Exchange Commission (BSEC) in early June.

“The new BSEC leadership has sent a strong signal that restoring discipline, transparency and investor confidence is now a top priority.”

The regulator has already introduced several reforms, including lifting floor prices on shares of Beximco and Islami Bank, restoring the stock exchanges’ authority to determine circuit breakers and trading rules, and strengthening market surveillance.

“The regulator’s reform initiatives have created positive expectations among investors, who believe the market is moving towards a more transparent and efficient environment.”

Alam said the BSEC’s plan to review securities regulations, IPO approval procedures and disclosure requirements could further improve the investment climate.

“If the reform momentum continues alongside further improvements in macroeconomic stability, the stock market could sustain its recovery in the coming months despite lingering challenges from tight monetary conditions and relatively high interest rates.”

Investor sentiment also received a boost from several capital market-friendly measures included in the approved Finance Bill 2026. These include a lower tax on dividend income, removal of the investment ceiling for claiming tax rebates on mutual fund investments and the continuation of tax exemptions on income from zero-coupon bonds for individual investors.

The broader market also ended the week higher. The DS30 Index, which tracks blue-chip companies, gained 16 points to 2,177, while the Shariah-based DSES Index rose 20 points to 1,189.

Selective gains in blue-chip stocks, including Beximco Pharma, Unique Hotels, Shepherd Industries, Bangladesh Spinning Corporation and GPH Ispat, accounted for about one-third of the benchmark index’s weekly rise.

Market activity remained robust, with total turnover on the DSE increasing to Tk 69.2 billion from Tk 57.4 billion in the previous holiday-shortened week. Average daily turnover stood at Tk 13.83 billion.

The textile sector accounted for the largest share of weekly turnover at 18 per cent, followed by general insurance (12 per cent) and pharmaceuticals (10 per cent).

Market breadth remained positive, with 251 stocks advancing, 122 declining and 15 remaining unchanged.

Among the sectors, power posted the highest gain of 2.2 per cent, followed by pharmaceuticals, food, non-bank financial institutions and telecommunications.

Malek Spinning was the week’s most-traded stock, with shares worth Tk 2.08 billion changing hands. Beximco Pharma, IT Consultants, Beximco and BRAC Bank were among the other heavily traded issues.

The Chittagong Stock Exchange (CSE) also closed higher during the week. Its All Share Price Index (CASPI) gained 108 points to 15,515, while the Selective Categories Index (CSCX) advanced 57 points to 9,493.