Stocks rebound on tax review hope

Stocks rebounded on Wednesday, after remaining flat in the past few sessions, as investors showed their buying appetite on tax review expectations.
Market insiders said tax review expectations coupled with June closing year-end earnings and dividend declarations prompted investors to inject fresh funds on stocks.
The 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.
The finance minister 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.
In the wake of strong criticism from market stakeholders, the National Board of Revenue (NBR) chairman hinted at the possibility of reviewing the proposals announced in the budget for fiscal year (FY) 2019-20.
The Bangladesh Securities and Exchange Commission (BSEC) also sought tax on listed companies' future reserves.
A leading broker said possibility to revise the proposed tax on listed companies' reserve and retained earnings made investors hopeful.
Two other indices also ended higher. The DS30 index, comprising blue chips, advanced 15.06 points to finish at 1,911 and the DSE Shariah Index gained 11.11 points to close at 1,241.
Turnover, another important indicator of the market, stood at Tk 4.31 billion, which was 5.0 per cent lower than the previous day's turnover of Tk 4.53 billion.
EBL Securities said investors spurred their buying spree on large-cap stocks, particularly from telecommunication, power and banking sectors, taking the market in the higher note.
The power sector booked the highest gain of 1.27 per cent, followed by telecommunication with 1.21 per cent, engineering 0.84 per cent, pharmaceuticals 0.77 per cent, food 0.72 per cent, banking 0.25 per cent and financial institutions 0.22 per cent.
A total number of 115,299 trades were executed in the day's trading session with trading volume of 114.77 million securities.
The market capitalisation of the DSE also rose to Tk 3,993 billion on Wednesday, from Tk 3,969 billion in the previous session.
The gainers took a modest lead over the losers as out of 353 issues traded, 173 advanced, 124 declined and 56 issues remained unchanged on the DSE trading floor.
Bangladesh General Insurance Company was the day's best performer, posting a gain of 8.84 cent while IPDC Finance was the worst loser, losing 17.98 per cent following its price adjustment after record date.
The port city bourse, Chittagong Stock Exchange, also ended higher with its CSE All Share Price Index - CASPI -advancing by 83 points to settle at 16,561 and the Selective Categories Index - CSCX -gaining 51 points to finish at 10,036.
Here too, the losers beat gainers, as 130 issues closed higher, 103 lower and 34 remained unchanged on the CSE trading floor.
The port city bourse traded 9.67 million shares and mutual fund units worth Tk 394 million in turnover.

[email protected]