Stocks rebound amid budget review hope

Stocks rebounded last week that ended Thursday, after a single-week break, as investors showed their buying appetite on large-cap stocks amid anticipation of budget review.
Market insiders said several factors like budget review expectation, June closing year-end earnings and dividend declarations coupled with post-Eid optimism prompted investors to inject fresh funds on stocks.
Following the wide-spread criticism over the new VAT law and excise duty hike on bank-account balance in the proposed budget, the government is likely to back-track to implement the new VAT law. The government is also set to review excise duty on bank-account balance for small savers for the Fiscal Year (FY) 2017-18.
It was the last week before Eid vacation as trading and official activities remained closed for five days (June 23 to June 27) in line with the government holidays.
The week witnessed five trading sessions as usual. Of them, first one faced mild correction while last four closed higher amid increased trading activities.
Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 130.75 points or 2.39 per cent to settle at 5,599.
"Bullish mentality was prevalent in the market as the deadline for investment tax benefit neared and profit booking ahead of Eid was mostly finished before the week," commented LankaBangla Securities, a stockbroker, in its weekly market analysis.
The two other indices also closed higher. The DS30 index, comprising blue chips, advanced 40.11 points or 1.97 per cent to close at 2071. The DSE Shariah Index gained 24 points or 1.90 per cent to close at 1,286.
The port city bourse, Chittagong Stock Exchange (CSE), also finished higher with its Selective Categories Index, CSCX, advancing 241 points or 2.35 per cent to settle at 10,490.
City Bank Capital Resources, a merchant bank, said, "Healthy gain triggered by investing on large-cap stocks expecting positive movement after Eid vacation".
The merchant bank noted that there was also positive sentiment in investor mind on scrapping the implementation of New VAT law for next fiscal year.
The total turnover for the week stood at Tk 31 billion on DSE, registering an increase of 34 per cent over the previous week's Tk 23.17 billion.
The daily turnover averaged at Tk 6.21 billion, which was 34 per cent higher than the previous week's average of Tk 4.63 billion.
Textile sector kept dominance in turnover chart, contributing 20 per cent of the week's total turnover value, followed by bank 16 per cent and pharmaceuticals 14 per cent.
International Leasing Securities, a stockbroker, said, "Several factors like budget review expectation, June closing year-end earnings and dividend declarations coupled with post-Eid optimism prompted the investors to inject fresh funds on stocks".
The stockbroker noted that buoyancy of shares mostly from bank, engineering, telecom, ceramic and financial institution sectors contributed to the upsurge in indices.
EBL Securities, a stockbroker, said, "The market gained momentum as investors' regained confidence after the declaration that previous VAT law is expected to remain effective for next two years".
The gainers took a strong lead over the losers as out of 333 issues traded, 257 issues closed higher, 52 closed lower and 24 remained unchanged on the DSE trading floor.
The total market cap of the DSE also advanced 1.79 per cent last week as it was Tk 3,706 billion on the opening day of the week, while stood at Tk 3,772 billion on closing day of the week.
Regent Textile topped the week's turnover chart with about 42.91 million shares of Tk 1.30 billion changing hands, followed by LankaBangla Finance Tk 1.06 billion, Paramount Textile Tk 797 million, Nurani Dyeing Tk 683 million and IFAD Autos Tk 647 million.
CVO Petrochemical Refinery was the week's highest gainer, posting a 25.37 per cent rise, while National Tea Company was the worst loser, losing 12.66 per cent.
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