Dhaka stocks advanced for the second day on Wednesday as investors increased their share purchasing amid the news that finance minister AMA Muhith was brewing a business-friendly budget by cutting corporate tax.
Muhith on Monday hinted that he might cut corporate tax in the national budget for the upcoming fiscal year.
The finance minister will place the budget for the fiscal year of 2018-19 before parliament today.
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 from Tuesday, market operators said.
DSEX, the key index of Dhaka Stock Exchange, gained 0.97 per cent, or 51.95 points, to close at 5,398.75 points on Wednesday after gaining 33.09 points in the previous session. Before the two-day gains, the DSEX lost 143 points in six consecutive trading sessions.
The market began with upbeat momentum on Wednesday and the rise accelerated in late hours as investors went for fresh investment on budget expectations.
Muhith on Monday hinted that the corporate tax on financial entities 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.
Currently, listed banks, NBFIs and insurance companies are paying corporate tax at the rate of 40 per cent.
Therefore, the financial sectors were the main driver of the day’s market move as banks and non-bank financial institutions gained 3.05 per cent and 0.73 per cent respectively.
Out of the 30 traded bank scrips, the prices of the shares of all banks except AB Bank advanced on the day.
The share prices of miscellaneous, energy and cement sectors joined the rally as well.
Before the gains, the market had been continuously declining amid the banking sector woes as most of the banks reported profit fall in their annual and first quarter reports.
On Wednesday, the average share prices of pharmaceuticals, telecommunication and food declined by 0.3 per cent, 0.2 per cent and 0.1 per cent respectively.
The turnover at the DSE advanced to Tk 456.42 crore on Wednesday compared with that of Tk 382.3 crore in the previous session.
‘The market started with upbeat momentum and continued this trend till the end of the session as opportunistic investor opted to take fresh positions on stocks especially from bank and fuel and power sectors ahead of the budget declaration,’ said EBL Securities in its daily market commentary.
Of the 335 companies and mutual funds traded on the day, 177 advanced, 104 declined and 55 remained unchanged.
DS30, the blue-chip index of the DSE, advanced by 0.66 per cent, or 13.11 points, to finish at 1,993.55 points.
Shariah index DSES added 0.22 per cent, or 2.85 points, to close at 1,245.90 points.
Alif Industries led the turnover chart with its shares worth Tk 25.40 crore changing hands.
Bangladesh Export Import Company, Khulna Power Company, Monno Ceramics, Berger Paints Bangladesh, United Power Generation Company, Square Pharmaceuticals, Intraco Refueling Station, BRAC Bank and Grameenphone were the other turnover leaders.
Bangladesh Autocars gained the most with a 9.97-per cent increase in its share prices, while Intraco Refueling Station was the worst loser, shedding 6.32 per cent.
The trading at the DSE will remain closed from June 13 to June 18 or 19 due to Shab-e-Qadr and Eid-ul-Fitr holidays.
After the vacation, the trading hours and office hours at the bourse will revert to their previous schedules —trading hours from 10:30am to 2:30pm and office hours from 9:30am to 5:30pm.
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