Dhaka stocks rose marginally for the second day on Wednesday amid nervy trading as investors awaited the government move to review the proposed tax on listed companies’ reserve.
DSEX, the key index of Dhaka Stock Exchange, added 0.20 per cent, or 11.16 points, to close at 5,411.40 points on Wednesday after gaining 24.94 points in the previous day.
Before the two-day rise, the DSEX lost 96.52 points in two sessions.
The market was choppy throughout the session with a couple of ups and downs but ended with marginal gain.
Market operators said that investors remained cautious as they awaited the government move to review the proposed taxes on listed companies.
Following intense criticisms, National Board of Revenue chairman Mosharraf Hossain Bhuiyan on Monday said that the 5 per cent tax on listed companies’ reserve and retained earnings would be reconsidered that has lessened worries among investors, they said.
Finance minister AHM Mustafa Kamal on June 13 in the proposed national budget for the fiscal year of 2019-20 slapped 15 per cent tax on retained earnings and reserve of a listed company if the figures exceed 50 per cent of the paid-up capital of the company.
He also proposed imposition of tax on the value of stock dividend at the rate of 15 per cent, which will be collected from the listed companies within sixty days of such dividend declaration.
The moves triggered panic sales in the capital market and the DSE key index plunged by 96 points in two days after the declaration.
Market regulator Bangladesh Securities and Exchange Commission chairman M Khairul Hossain at a meeting with stakeholders on Monday said that he would also discuss the tax issue with the NBR chairman and the finance minister.
‘Investors continued to remain divided over the government’s move to tax the stock dividend and companies’ reserve and retain earnings with a section of general investors backing the government move while others, especially institutional investors, opposing the move,’ said a stockbroker.
‘As a result, the trading on Wednesday remained choppy. Investors are now waiting to see what sort of changes the government makes to the tax proposals,’ he said.
The turnover at the bourse increased to Tk 554.04 crore on Wednesday from Tk 528.82 crore in the previous session.
The share prices of insurance companies have been rising significantly in recent days as the sector is getting importance recently, market operators said.
The average share prices of life insurance sector advanced by 3.29 per cent and that of general insurance by 1.23 per cent.
The share prices of energy also gained 0.82 per cent, non-bank financial institution 0.66 per cent and bank 0.07 per cent.
The share prices of textile shed 1.37 per cent, food 0.42 per cent and telecommunication 0.40 per cent.
Out of the 351 shares and mutual funds traded on Wednesday, 174 declined, 124 advanced and 53 remained unchanged.
DS30, the blue-chip index of DSE, also gained 0.14 per cent, or 2.70 points, to close at 1,897.81 points.
DSE Shariah index DSES added 0.22 per cent, or 2.78 points, to close at 1,235.07 points.
United Power Generation Company led the turnover chart with its shares worth Tk 21.30 crore changing hands.
Eastern Insurance, JMI Syringe, Nurani Dyeing, Sonar Bangla Insurance, Rupali Life Insurance, Global Insurance, Dragon Sweater, Eastland Insurance and Pragati Life Insurance were the other turnover leaders.
Rupali Life Insurance gained the most on the day with a 9.95-per cent increase in its share prices while Northern General Insurance Company was the worst loser, shedding 6.52 per cent.
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