Bangladesh’s stocks rebound after single-week break

Dhaka, Bangladesh (BBN)– Bangladesh’s stocks rebounded last week that ended on Thursday as the investors were optimistic about the tax review measures for the capital market in the approved budget.

Expectations for a tax review and year-end earnings and dividend declarations prompted the investors to inject fresh funds into stocks, according to market operators.

Finance Minister AHM Mustafa Kamal proposed, among other, imposition of 15 per cent additional tax on retained earnings and reserves, if the amount exceeds 50 per cent of the paid-up capital of the company in the national budget for the Fiscal Year (FY) 2019-20.

The finance minister also proposed imposition of 15 per cent tax on stock dividend to promote cash dividend as part of efforts to increase money flow into the stock market.

As these measures drew strong criticism from market stakeholders, the National Board of Revenue (NBR) chairman assured to review the proposals.

Meanwhile, the Bangladesh Securities and Exchange Commission (BSEC) also sent a proposal to the NBR on Tuesday last, seeking tax on listed companies’ future reserves.

Possibility to revise the proposed tax on listed companies’ reserve and retained earnings made investors hopeful, they explained.

The Jatiya Sangsad (JS) is set to pass the Finance Bill 2019 on Saturday, bringing some changes in taxes/duties proposed earlier in the finance minister’s budget speech.

The week saw five trading days as usual. Of them, first two sessions ended lower while last three edged higher.
Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 34.42 points or 0.64 per cent to settle the week at 5,430.

Two other indices also finished higher. The DS30 index, comprising blue chips, soared 30.52 points to finish at 1,924 and the DSE Shariah Index rose 12.55 points to close at 1,245.

The total turnover on the prime bourse stood at BDT 21.18 billion last week which was BDT 25.98 billion in the week before.

The daily turnover averaged BDT 4.23 billion, registering a decline of 18 per cent over the previous week’s average of BDT 5.19 billion.

They also said positive momentum in some big-cap stocks, particularly from telecom, bank, power, pharma and food sectors helped the index to close higher.

Most of the major sectors posted gain with power witnessed the highest gain of 1.85 per cent, followed by telecommunication with 1.52 per cent, banking 1.06 per cent, engineering 0.86 per cent, pharma 0.67 per cent.

On the other hand, insurance sector faced the highest correction of 5.35 per cent after recent upsurge, followed by non-bank financial institutions with 1.02 per cent.

The market capitalisation of the DSE also rose 0.65 per cent to BDT 4,004 billion on Thursday, from BDT 3,978 billion in the week before.

Losers outnumbered the gainers, as out of 354 issues traded, 172 closed lower, 159 ended higher and 23 issues remained unchanged on the DSE floor.

United Power dominated the week’s turnover chart again, with 2.78 million shares worth BDT 1.05 billion changing hands. The company accounted for 4.95 per cent of the week’s total turnover.

The other turnover leaders were JMI Syringes, Square Pharmaceuticals, Bangladesh Shipping Corporation and Fortune Shoes.

Prime Finance First Mutual Fund was the week’s best performer, posting a gain of 23.23 per cent while IPDC Finance was the worst loser, losing 18.44 per cent.

On the other hand, Chittagong Stock Exchange (CSE) also ended higher, with its CSE All Share Price Index — CASPI –advancing 120 points to settle at 16,642 points and the Selective Categories Index — CSCX –rising 75 points to finish at 10,086.

BBN/SSR/AD