Stocks fall for third day ahead of budget passage

Staff Correspondent | Published: 00:00, Jun 25,2019


Dhaka stocks inched down on Monday, stretching the fall to the third day, as investors continued trading cautiously ahead of passage of the national budget.

Market operators said that investors were anxiously waiting to see what steps the government would take in reviewing the taxes on the listed companies’ reserve and stock dividend it proposed in the budget for the financial year of 2019-20.

The proposed national budget, which was placed before parliament on June 13, is likely to be passed in the parliament on June 30.

DSEX, the key index of Dhaka Stock Exchange, lost 0.08 per cent, or 4.74 points, to close at 5,379.15 points on Monday after losing 27.5 points in the previous two sessions.

After a slight gain in the first half an hour of trading, the market began to dip with DSEX losing around 19 points by mid-session.

But, the key index bounced bank slightly after mid-session, closing the day with minimal losses, as some investors went for bargain hunting.

Market operators said that most investors continued with cautious trading as they awaited government move to review the proposed 15 per cent tax on listed companies’ reserve, retained earnings and stock dividend.

Since finance minister AHM Mustafa Kamal in the proposed national budget for FY20 slapped the taxes on the listed companies, the market has been going through turmoil.

National Board of Revenue chairman Mosharraf Hossain Bhuiyan on June 17 said that the 15 per cent tax on listed companies’ reserve and retained earnings would be reconsidered. Bangladesh Securities Exchange Commission chairman M Khairul Hossain also said that he would discuss the proposed tax with the government.

‘Investors are now waiting to see what sort of changes the government ultimately makes in proposed taxes on the listed companies when the budget is passed in the parliament,’ said a stockbroker.

The new budget will be effective from July 1.

EBL Securities in its daily market update said, ‘The prime bourse of the country continued it’s downward trend for the third consecutive sessions as risk-averse investors booked profits on sector specific stocks.’

‘Lack of confidence arose among investors concerning the tax review issue on excess reserve and also on stock dividend of listed company,’ it said.

It said investors’ watchful stance had pulled down the index to the red zone as selling pressures had been spurred on sector specific stocks especially from telecommunication, bank and cement sectors.

The turnover at the bourse rose to Tk 378.13 crore on Monday from Tk 338.20 crore on Sunday.

Out of the 352 shares and mutual funds traded on Monday, 156 declined, 155 advanced and 41 remained unchanged.

All the sectors displayed mixed performance on the day.

Among the gainers, the average unit prices of mutual funds soared by 4.6 per cent, IT 0.9 per cent, jute 0.7 per cent, textile 0.4 per cent and power and energy 0.3 per cent.

Share prices of general insurance sector dropped by 1.1 per cent, ceramic 0.9 per cent, cement 0.8 per cent, telecom 0.6 per cent and travel sector 0.4 per cent.

DS30, the blue-chip index of DSE, gained 0.15 per cent, or 2.89 points, to close at 1,893.82 points.

DSE Shariah index DSES lost 0.11 per cent, or 1.38 points, to close at 1,230.04 points.

United Power Generation Company led the turnover chart with its shares worth Tk 15.90 crore changing hands.

JMI Syringe, Bangladesh Shipping Corporation, National Polymer, RN Spinning Mills, BRAC Bank, Genex Infosys, Sinobangla Industries and Monno Ceramics were the other turnover leaders.

SEML FBSL Growth Fund gained the most on the day with a 10-per cent increase in its unit prices while Peoples Leasing and Financial Services was the worst loser, shedding 5.88 per cent. 

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