The Dhaka Stock Exchange's (DSE) benchmark index DSEX crossed 6,400 points for the first time in its history, driven by the banks and insurance stocks.
On Monday, the last trading day before Eid vacation, DSEX rose by 0.62% to reach 6,405 points, where blue-chip index DS30 increased 0.70% to close at 2,322 points.
Earlier, the DSEX's highest position since its launching in 2014 was 6,338 points posted on 26 November 2017.
On Monday, investors showed more interest in banks and insurance stocks in the hope of earnings disclosure for the first half of this financial year.
Five banks have declared their earnings disclosure of the first half of this year so far. They reported surprising growth in profit, according to their unaudited financial statements.
The managing director of a private bank, speaking on condition of anonymity, told The Business Standard that although interest rates on loans were reduced last year, deposit rates were higher.
That is why the spread decreases and the profit of the banks is strained. But this gap is widening this year as interest rates on deposits have fallen, resulting in rising profits, he added.
According to the central bank, the average interest rate on bank deposits in the first six months of last year was around 5.5-6%. But in January-April this year, the rate came down below 4.5%. If the interest rate on loans is 9%, the spread has increased by 1.5-2%.
Bankers say most banks have invested their excess liquidity in treasury bonds due to low demand for loans. The lenders have received massive profits from there. Again, due to the closure of loan classification as a result of the coronavirus pandemic, banks have had to keep much less reserves (provision) against loans than usual.
Riding on the earnings optimism, investors got 1.2% return from the bank sector, while the general insurance sector secured the top position in the sectoral return chart.
Meanwhile, EBL Securities said in its daily market review that although investors were active on both sides of the market, gains in certain medium and large cap stocks have kept the index on the green zone.
Regulatory reform initiatives, lower money market return, eased lockdown restrictions are some of the factors contributing to the heightened investors' confidence in the market, it observed.
But, the worries of investors may be widened by the adverse impact on the economy from the instruction of the cabinet ministry to close all industries including garments for two weeks after Eid, it added.
However, the DSE turnover decreased by 29% to stand at Tk1,264 crore on Monday compared to the previous trading session.
During Monday's session, 159 companies' share prices advanced, 179 declined and 34 remained unchanged at the DSE.
The most-traded share was Saif Powertec with a trade value of Tk28 crore, which was followed by British American Tobacco and Fu-wang Ceramic.
In the top ten gainer list, eight companies came from the insurance sector while newly listed Baraka Patenga Power secured the top position in this list followed by Global Insurance, Beacon Pharma and Central Insurance.
Pioneer Insurance was the worst share which lost 7.72% prices due to selling pressure for booking profit on Monday as its share prices jumped above 184% in the last couple of months.
The port city bourse Chittagong Stock Exchange's key index CASPI gained 190 points to close at 18,569 on the day.