Stocks tumbled further on Monday, with the key index of the prime bourse falling below 6,400-mark after eight sessions, as the proposed budget failed to meet investors expectations.
Instability of exchange rate and worries on the runaway inflation due to the global commodity price volatility also hit investor sentiment on the trading floor, market insiders said.
The market turned slightly positive in the morning but only after 10 minutes of trading it lost the momentum and went down steadily, ultimately closing over 39 points lower.
DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 39.47 points or 0.61 per cent to settle at 6,391. DSEX slumped over 92 points in the past three days.
Market analysts said the investors are selling shares as they are not happy with the budgetary measures given for the stock market.
Finance Minister AHM Mustafa Kamal has proposed no new incentives, other than the reduction in corporate tax for the listed companies on some conditions which disappointed investors, they said.
The budget proposed a corporate tax cut of 2.5 percentage points for both listed and non-listed companies.
However, the tax gap between listed and non-listed firms remained unchanged at 7.50 per cent which analysts think would discourage non-listed firms from going public.
Besides, conditions were given that firms will have to float more than 10 per cent of shares and maintain all income transactions through banking channels to enjoy the tax benefit.
"The investors reacted negatively to the budget proposals as the budget proposed conditions to get tax benefits of listed companies," said a leading broker.
The stock market intermediaries have long been demanding for widening the tax gap at least 10 per cent between listed and non-listed firms to attract well-performing firms into the market, he said.
The investors' sentiment was negative across the bourse after unveiling the budget as the budget proposals failed to match up to the investors' expectations, said EBL Securities.
Most investors remained conservative in market-investments as they anticipate that the inflation and exchange-rate volatility may get elevated in the coming quarters, said the stockbroker.
"The stock market logged another negative session reflecting uncertainty in the future market directions," said International Leasing Securities.
Five large-cap stocks such as Grameenphone, Beximco, Walton, LafargeHolcim and British American Tobacco jointly accounted for 15 points fall of DSEX, according to amarstock.com, a market data analyst.
Two other indices also ended lower. The DSE 30 Index, comprising blue chips, dropped 17.67 points to close at 2,316 and the DSE Shariah Index (DSES) lost 8.24 points to settle at 1,394.
Turnover, the crucial indicator of the market, however, rose to Tk 7.98 billion, which was 25 per cent higher than the previous day's tally of Tk 6.36 billion.
Major sectors posted negative performances with the telecom sector facing 0.60 per cent corrections, followed by banking with 0.50 per cent, engineering 0.40 per cent, pharma 0.40 per cent, food 0.30 per cent and power 0.20 per cent.
The Chittagong Stock Exchange (CSE) ended lower with the CSE All Share Price Index - CASPI -losing 101 points to settle at 18,789 and the Selective Categories Index - CSCX, fell 62 points to close at 11,267.
[email protected]
