Signs of growing investor confidence are emerging in the capital market ahead of the upcoming national election, reflected in recent trading activity and index movements at the Dhaka Stock Exchange (DSE).

Despite continued volatility, market capitalisation has remained largely stable between Tk6.95 lakh crore and Tk7 lakh crore, suggesting positive medium- to long-term expectations among investors.

An analysis of the last 10 trading sessions shows an overall upward trend in the benchmark index. Daily turnover, which hovered between Tk300 crore and Tk400 crore in December, has risen to around Tk700 crore in recent sessions. The market also recorded eight consecutive days of index gains during this period.

Market participants say that as the election approaches, investors are increasingly targeting companies perceived to have political links with BNP and Jamaat. This shift in investment preference is being cited as a key driver behind the recent surge in trading volume.

Over the past 10 trading days, the index advanced in six sessions. The highest single-day gain was 59 points, while the cumulative rise stood at 129 points.

During the same period, daily turnover peaked at Tk746 crore, the highest level in the last four months.

ICB Chairman and capital market analyst Abu Ahmed said that heightened investment activity ahead of elections is not unusual, particularly when major political forces are actively contesting.

“Either BNP or Jamaat will come to power, and whoever forms the government will run the country,” he said.

He added that investor confidence is closely linked to expectations of a democratically elected government.

“After the election, the new government is likely to take fresh initiatives for the capital market, and investors are positioning themselves in anticipation of that,” he said.

Abu Ahmed also noted that share prices of most listed companies are currently at relatively low levels.

“Investors expect that stocks linked to the major political parties may see price appreciation after the election, which is why many are entering the market now,” he added.

Index movement

Between 25 January and 5 February 2026, the DSEX index climbed from 5,072 points to a peak of 5,266 points.

Strong gains were recorded on 1 February and 2 February, when the index rose by more than 39 points and 54 points respectively, supported by robust investor participation.

However, on 5 February, the index fell by 32 points to close at 5,234, indicating some profit-taking after the recent rally.

During the same period, daily turnover increased from Tk492 crore to as high as Tk746 crore.

Despite fluctuations in the index, market capitalisation remained relatively steady, rising from Tk6.88 lakh crore to a peak of Tk7.08 lakh crore.

Market observers say investor sentiment has also been bolstered by election manifesto commitments related to capital market reforms.

BNP has pledged greater transparency, enhanced institutional participation and stronger regulatory independence, proposals that have generated positive discussion among investors.

Anam Ataullah Naim, president of the Bangladesh Capital Market Investors Unity Council, said it was encouraging that both major political parties have outlined plans to use the capital market as a tool for employment generation.

He added that BNP’s manifesto proposals -- including the formation of a special commission to investigate past irregularities, development of the bond market and green finance, and the introduction of a “Digital IPO Express” for startups -- could play an important role in the long-term development of the capital market.