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Stocks end flat as budget unveiled

Turnover drops 17pc on prime bourse

FE REPORT | June 10, 2022 00:00:00

Stocks ended nearly flat on Thursday, as investors mostly followed cautious stance just ahead of unveiling the national budget.

Finance Minister AHM Mustafa Kamal unveiled the national budget for the Fiscal Year (FY) 2022-2023 on Thursday evening.

DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 3.95 points or 0.06 per cent to settle at 6,480, after gaining over 15 points in the previous day.

The DSE 30 Index, comprising blue chips, also fell 1.26 points to close at 2,352. However, the DSE Shariah Index (DSES) advanced 0.79 points to settle at 1,413.

Turnover, the crucial indicator of the market, stood at Tk 7.58 billion, which was 17 per cent lower than the previous day's tally of Tk 9.19 billion.

Market insiders said investors were cautiously waiting and analyzing the proposed budget before making any further investment decisions.

The Finance Minister has proposed no new incentives, other than the reduction in corporate tax for the listed companies, for stock market investors in the next national budget.

The finance minister proposed tax rate of 20 per cent in place of existing 22.5 per cent for listed companies that issue shares worth more than 10 per cent of its paid-up capital through initial public offering (IPO) on condition that all receipts and income must be transacted through bank transfer.

However, he proposed a tax rate to be 22.5 per cent for a listed company that issues shares worth 10 per cent or less than 10 per cent of its paid-up capital through IPO.

The tax rate would be 25 per cent instead of 22.5 per cent if the company fails to comply with the conditions mentioned earlier.

The tax gap between listed and non-listed firms remained, however, unchanged, which analysts think would discourage non-listed firms from going public, said a merchant banker.

Favorable regulatory interventions and budgetary concessions for sector-specific issues may create opportunities for prudent investors in upcoming sessions, said EBL Securities.

Most of the large-cap sectors posted negative performance. Food & allied experienced the highest loss of 0.76 per cent, followed by financial institutions with 0.38 per cent, engineering 0.14 per cent, power 0.02 per cent.

On the other hand, telecom and banking sectors gained 0.42 per cent and 0.05 per cent respectively.

Out of the 380 issues traded, 196 declined, 137 advanced and 47 issues remained unchanged.

Newly listed Meghna Insurance was the day's top gainer, posting a 10 per cent gain further while Union Insurance was the worst loser, losing 7.43 per cent following its corporate declaration.

Beximco was the most traded stock with shares worth Tk 446 million changing hands, followed by Shinepukur Ceramics (Tk 355 million), IPDC Finance (Tk 177 million), Fortune Shoes (Tk 172 million) and Anwar Galvanizing (Tk 149 million).

The Chittagong Stock Exchange (CSE) edged up with the CSE All Share Price Index - CASPI -gaining 1.92 points to settle at 19,025 and the Selective Categories Index - CSCX, rose 1.39 points to close at 11,410.

Of the issues traded, 144 declined, 101 advanced and 51 remained unchanged on the CSE.

The port-city bourse traded 9.09 million shares and mutual fund units with a turnover value of Tk 302 million.

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