Dhaka stocks on Tuesday snapped a six-day losing streak as investors went for bargain hunting after finance minister AMA Muhith hinted that he might cut corporate tax in the national budget for the upcoming fiscal year.
The cut in corporate tax would increase the profitability of listed banks, non-bank financial institutions and insurance companies that encouraged investors to invest in stocks, market operators said.
Muhith will place the national budget before parliament tomorrow.
DSEX, the key index of Dhaka Stock Exchange, gained 0.62 per cent, or 33.09 points, to close at 5,346.80 points on Tuesday after shedding 143 points in the previous six trading sessions.
The market began to rise from the very beginning of the day and jumped more firmly as the day progressed as investors went for bargain hunting, market operators said.
The media reports that corporate tax was likely to be cut to 37.5 per cent and the income tax threshold would remain unchanged while no new tax would be imposed in the upcoming national budget encouraged investors, they said.
Currently, listed banks, NBFIs and insurance companies are paying corporate tax at the rate of 40 per cent.
The average share prices of all the large capitalised sectors except telecommunication advanced on the day while financial shares were the catalyst of Tuesday’s surge.
The average share prices of non-bank financial institutions, pharmaceuticals and bank sectors gained 0.92 per cent, 0.9 per cent and 0.8 per cent respectively.
A gain in share prices of Square Pharmaceuticals, Investment Corporation of Bangladesh and Titas Gas contributed to the market rebound on Tuesday.
Despite ending the session positive, the market is yet to eclipse the fear of the relentless fall in share prices of most of the scrips.
Therefore, the turnover at the DSE dropped further to Tk 382.3 crore on Tuesday compared with that of Tk 402.05 crore in the previous session.
The market has been sluggish for more than a month due mainly to the banking sector woes.
The country’s banking sector is plagued with scams, huge defaulted loans and poor governance that dented the market sentiment, market operators said.
They said most of the banks witnessed profit falls and eventually declared poor dividends for the year 2017 that kept the investors on edge.
The net foreign investment at the DSE also remained negative for another month in May with Tk 282 crore that also weighed on the index.
The share prices of Grameenphone, Beximco Pharmaceuticals and Renata dropped most on Tuesday.
‘The market opened with optimistic vibe and continued till the end of the session as opportunistic investors opted to take fresh position for rebalancing their portfolios driven by the hopes ahead of budget declaration,’ said EBL Securities in its daily market commentary.
Of the 335 companies and mutual funds traded on the day, 163 advanced, 106 declined and 65 remained unchanged.
DS30, the blue-chip index of the DSE, gained 0.37 per cent, or 7.42 points, to finish at 1,980.43 points.
Shariah index DSES added 0.64 per cent, or 8.01 points, to close at 1,243.04 points.
Alif Industries led the turnover chart with its shares worth Tk 19.98 crore changing hands.
Monno Ceramics, Bangladesh Export Import Company, Shasha Denims, Square Pharmaceuticals, Khulna Power Company, Grameenphone, BD Autocars, Intraco Refueling Station and Berger Paints Bangladesh were the other turnover leaders.
Bangladesh Autocars gained the most with a 9.30-per cent increase in its share prices, while MBL 1st Mutual Fund was the worst loser, shedding 9.30 per cent.
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