Stocks fall in 5 out of 6 days after budget passage

Image: Bizbangladesh.net
Dhaka stocks on Monday fell in five out of six sessions since parliament passed the Finance Bill 2019 imposing new taxes on the listed companies.

DSEX, the key index of Dhaka Stock Exchange, shed 0.27 per cent, or 14.47 points, to close at 5,318.61 points on Monday after losing 47.70 points in the previous session.

The index had only inched up by 8.58 points on Thursday on bargain hunting following a three-day fall.

Market operators said the downward trend was triggered by the new tax measures on the listed companies and the government’s move to hike gas price.

Despite Thursday’s gain, the DSEX lost 111.43 points in six trading sessions since parliament passed the Finance Bill 2019 with the new tax measures on June 29.

Market operators said that investors were disappointed as they found little incentives in the finance bill which imposed 10 per cent tax on listed cos’ stock dividend if it exceeds cash dividend.

It also levied 10 per cent tax on the amount of profits transferred to reserve by a listed company if the amount exceeds 70 per cent of the company’s net profits for the year.

Investors are now trying to find out safe bets by selling shares in their possessions so that they don’t lose further, said a stockbroker.

As a result, investors on Monday focused heavily on the insurance sector which would need to increase paid up capital to comply with a new insurance law, he said.

Before Monday, unit prices of mutual funds also rose sharply for few days despite fall in prices of majority of scrips, he said.

‘Typically, investors should now focus on quarterly or annual reports of listed companies. But the budget measures and the government decision to hike gas price hampered the investors’ psyche,’ he said.

Share prices of the manufacturing sector particularly textile has been falling because of the gas price hike, market operators said.

The trading on the bourse on Monday remained volatile with ups and downs of the DSEX before ending in the negative zone.

EBL Securities in its daily market update said, ‘The capital bourse of the country witnessed another price correction today [Monday] as risk-averse investors booked profits on sector specific stocks.’

The market displayed zigzag movement throughout the day’s session as investors might have hesitated to take fresh stake in the market and undertook a ‘wait-and-see’ strategy ahead of dividend declarations of companies, it said.

Except the insurance sector, prices of all the major sectors fell on the day with mutual funds shedding 4.5 per cent, telecommunication 1.9 per cent, ceramic 1.4 per cent, services 1.4 per cent, IT 1.2 per cent, textile 0.9 per cent, non-bank financial institution 0.6 per cent and bank 0.1 per cent.

Share prices of the insurance sector rose by 2.5 per cent.

Out of the 353 scrips traded on the day, 198 declined, 116 increased and 39 remained unchanged.

Turnover on the bourse rose slightly to Tk 424.66 crore on the day from Tk 487.53 crore in the previous session.

DS30, the blue-chip index of DSE, dropped by 0.22 per cent, or 4.22 points, to close at 1,886.16 points.

DSE Shariah index DSES shed 0.42 per cent, or 5.22 points, to close at 1,216.23 points.

National Life Insurance led the turnover chart with its shares worth Tk 18.86 crore changing hands.

Asian Tiger Sandhani Life Growth Fund, Runner Automobiles, Rupali Life Insurance, JMI Syringe, Silco Pharmaceuticals, Square Pharmaceuticals, United Power Generation, Pragati Life Insurance and Singer Bangladesh were the other turnover leaders.

Pragati Life Insurance gained the most on the day with a 13-47 per cent increase in its share prices as the company offered two rights shares against each existing share while ICB Employees Provident MF1: Scheme 1 was the worst loser, shedding 9.86 per cent.  
Source: http://www.newagebd.net

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