Stocks flat as textile sector shines on tax cut hope

Staff Correspondent | Updated at 12:30am on August 31, 2018

Dhaka stocks inched down for the second session on Thursday as investors went for heavy buying of textile sector scrips, selling other stocks, in the hope that the government would cut export tax for the apparel sector next week.
DSEX, the key index of Dhaka Stock Exchange, shed 0.04 per cent, or 2.61 points, to close at 5,600.64 points on Thursday after losing 16.16 points in the previous session.
The market was positive in most of the time in Thursday’s session with most of the scrips of the textile sector gaining heavily.
The key index, however, ended in the negative territory as investors went for selling shares of sectors like banks and non-bank financial institutions in the last hour to adjust their portfolios, market operators said.
Four textile-sector scrips hit the upper price limit. The share prices of the textile sector advanced by 1.8 per cent with leading the turnover chart on Thursday, and out of the 50 traded textile scrips, 39 advanced, just seven declined and four remained unchanged.
Market operators said that investors were anticipating that the government would issue an order cutting tax at source for exports, including that of apparel items, to 0.6 per cent from 1 per cent by the next week.
The corporate income tax rate for the RMG manufacturers and exporters is also likely to be cut to 12 per cent from the existing 15 per cent.
According to recent media reports, the National Board of Revenue has sent a proposal for the tax cuts to the law ministry for vetting.
The share prices of the bank sector shed by 0.01 per cent, losing for the third consecutive session while the share prices of NBFIs dropped by 1.3 per cent that weighed on the index.
Investors booked profits from the NFBI sector, market operators said.
Besides the financial sectors, the share prices of pharmaceuticals, telecommunication and cement dropped by almost 0.3 per cent each.
Energy, miscellaneous and engineering sectors gained on the day that saved the market from further decline.
The turnover on the
DSE advanced further to Tk 722.37 crore on Thursday compared with that of Tk 633.38 crore in the previous trading session.
‘The market opened on positive note but failed to stay positive as investors opted to book profits on large-cap stocks, which posted significant gains in the previous sessions,’ said EBL Securities in its daily market commentary.
Of the 335 companies and mutual funds traded, 165 declined, 117 advanced and 51 remained unchanged.
DS30, the blue-chip index of the DSE, also lost 0.36 per cent, or 7.09 points, to close at 1,960.71 points.
Shariah index DSES also shed 0.03 per cent, or 0.47 points, to finish at 1,269.60 points.
Khulna Power Company led the turnover chart with its shares worth Tk 41.34 crore changing hands.
Saiham Textile Mills, IPDC Finance, United Power Generation Company, Active Finance, BBS Cables, LankaBangla Finance, Regent Textiles and RD Food were the other turnover leaders.
Tosrifa Industries gained the most on the day with a 10-per cent increase in its share prices, while Savar Refractories was the worst loser, shedding 6.32 per cent.