Stocks climb on prospect of tax review

Stocks crawled back into the green in the outgoing week, reclaiming some losses from the previous week, as investors see a possibility of a review of the budgetary measures for the capital market.
Market analysts said high expectations for a tax review and upcoming year-end earnings and dividend declarations by companies prompted the investors to invest anew.
In the national budget for the fiscal year (FY) 2019-20, 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.
Mr Kamal 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 suggested reviewing the proposals.
On the other hand, the Bangladesh Securities and Exchange Commission (BSEC) also sent a proposal to the NBR on Tuesday last, seeking imposition of tax on listed companies' future reserves.
A leading broker said the possibility of revising the proposed tax on listed companies' reserve and retained earnings made investors hopeful.
The Jatiya Sangsad is set to pass the Finance Bill 2019 today (Saturday). Before the passage of the bill, it might see some changes in taxes and duties proposed in the budget, he said.
The outgoing week saw five trading days as usual. Of them, the first two sessions ended lower while the last three sessions edged higher.
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.
In the previous week, the prime index plunged 78.68 points or 1.44 per cent to 5,395.
Two other indices finished higher this week. 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 Tk 21.18 billion, down from Tk 25.98 billion in the week before.
The daily turnover averaged out at Tk 4.23 billion, registering a decline of 18 per cent over the previous week's average of Tk 5.19 billion.
According to the International Leasing Securities, the investors showed their buying interest at lucrative price levels ahead of June-closing declarations by companies and the approval of the proposed budget.
The stockbroker noted that positive momentum in some big-cap stocks, particularly from telecom, bank, power, pharma and food sectors, helped the index close higher.
Most major sectors posted gains, with the power sector witnessing the highest gain of 1.85 per cent, followed by telecommunications (1.52 per cent), banking (1.06 per cent), engineering (0.86 per cent) and pharma (0.67 per cent).
On the other hand, the insurance sector faced the highest correction of 5.35 per cent after recent upsurge, followed by non-bank financial institutions (1.02 per cent).
The market capitalisation of the DSE also rose 0.65 per cent to Tk 4,004 billion on Thursday from Tk 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.
The United Power dominated the week's turnover chart again, with 2.78 million shares worth Tk 1.05 billion changing hands.
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, shedding 18.44 per cent.
The port city bourse, 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.

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