Stock market drops in its first post-budget session
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THURSDAY, MAY 26, 2022
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Stock market drops in its first post-budget session

Economy

TBS Desk
16 June, 2019, 07:23 pm
Last modified: 16 June, 2019, 07:23 pm

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Stock market drops in its first post-budget session

Finance Minister AHM Mustafa Kamal proposed imposing 15 per cent tax on stock dividend distributed to the shareholders by any listed company.

TBS Desk
16 June, 2019, 07:23 pm
Stock market drops in its first post-budget session

Stocks on Sunday closed on its first post-budget trading session on a low as the proposed budget appears to have failed to boost investors’ confidence in the capital market.

The DSEX, country’s major stock index, closed 0.79 per cent lower at 5430 points, while the turnover fell 6.67 per cent to Tk5.34 billion.

The Blue-Chip index of Dhaka Stock Exchange DS30 closed at 1905.09 – a 0.72 per cent drop over the session.

In the Chittagong Stock Exchange (CSE) each of the indices lost more than its Dhaka counterpart on the percentage scale.

Selective companies’ index CSE50 experienced the deepest drop – over a one per cent fall at the end of the day.

Activities in the port city bourse also fell a bit on the day.

 “Investors have not directly made any comment on the proposed budget, rather they responded through their buying and selling at both the bourses”, Ahmed Rashid Lali, ex-President of DSE Brokers Association (DBA) told The Business Standard at the end of the trading session.

Earlier in a post-budget reaction, he said the capital market should have got top priority this time.

 “We all expected some concrete measures in addressing the ongoing liquidity crisis. But the proposed budget frustrated us.”

The imposition of 15 per cent tax on stock dividend will affect net profits of more than 200 listed companies, said Ahmed Rashid.

The government should backtrack from imposing tax on the companies’ capital strength, he added.

Equity analysts at different investment teams also sounded negative over the proposed tax.

If a listed company’s reserve and surplus exceed 50 per cent of its paid-up capital, it will have to pay 15 per cent tax on the excess asset each specific year, according to the National Board of Revenue.

Trading on Sunday started on a downtrend and it continued till the end of the trading session.

At the end of the day, the DSEX eventually closed at 5,430.84, having lost 43.47 points over the day’s trading.

At the end of the session, some 98 scrips at the DSE gained market capital and 201 of them were pushed into red territory while closing prices of 50 securities remained unchanged. 

Some 25.17 per cent of the day’s turnover came from gen insurance, construction materials and textile-knitting sectors.

Pharmaceutical accessories, tannery, footwear, power generation, and consumer goods sectors had the highest gains. 

On the other hand, life insurance, electric appliance, IT, textile-other, and power distribution sectors suffered the largest losses.

JMISMDL (+7.49 percent) topped the turnover list today, followed by UPGDCL (+2.07 percent), EHL (-2.86 percent), BBSCABLES (-1.59 percent), and NEWLINE (+6.96 percent). Some 98 securities gained market cap, 201 lost, and 50 remained unchanged.

On Thursday, Finance Minister AHM Mustafa Kamal proposed imposing 15 per cent tax on stock dividend distributed to the shareholders by any listed company, in the proposed budget for the 2019-20 fiscal.

 

Budget 2019-20 / Stock Market

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