The benchmark index of the Dhaka Stock Exchange - (DSEX) - registered 1.76 per cent rise Sunday, the biggest single-day gain in the last seven months, as withdrawal of capital gain tax in the final budget spurred the investors to return to the market.
"Withdrawal of the proposed capital gain tax, continuation of 10 per cent tax rebate for listed companies giving 30 per cent or more dividends, and making the limit for tax-free dividend income double in the budget for the fiscal year 2014-15 encouraged the investors to take position afresh," said an analyst.
These factors assisted DSEX to gain 77.64 points and close at 4,487.07. Sunday's gain was the biggest single-day gain since December 3, 2013. On that day, DSEX gained 112.80 points or 2.69 per cent.
DSE also saw significant improvement in turnover. The turnover stood at Tk 3.90 billion, which was 28.85 per cent higher than the previous session's value of Tk 3.03 billion.
"The investors exhibited positive reaction on the government's decision to withdraw the capital gain tax on individual investor level, increase tax-free income threshold and tax rebate for listed companies on 30 per cent dividend declaration," commented International Leasing Securities, in its daily market analysis.
LankaBangla Securities commented, "Withdrawal of the proposed capital gain tax has improved investors' sentiment, closing the heightening concern over it for the last few weeks".
The 10 per cent tax rebate facility for the companies giving 30 per cent or more dividends has been proposed, which is also very encouraging. Raising the limit for tax-free dividend income to Tk 20,000 from Tk 10,000 has conveyed positivity on the market, the stock broker added.
IDLC Investments said, "Finance Bill 2014 was passed on Saturday, leaving a bundle of opportunities for the capital market, especially for investors."
"Withdrawal of the proposed capital gain tax stimulated the investors very positively. Tax rebate seekers' investment continued flowing to the market, adding an additional boost to its activities," said the merchant bank.
"The government's decision to withdraw the capital gain tax, earlier proposed in the budget, definitely played an amazing role, leaving a positive mark on the market," said Zenith Investments.
Investors gladly welcomed the news, and their positive sentiment was clearly reflected in the stocks, setting the market in a vibrant mode, it opined.
