The broad index of the Dhaka bourse on Sunday plunged to 37-month low as risk-averse investors continued to dump their holdings to avoid further loss amid inherent macroeconomic worries and an indication of capital gain tax in the upcoming budget.
The DSEX, broad index of the Dhaka Stock Exchange (DSE), went below the 5,500-point mark, owing to corrections witnessed by a majority of the stocks.
The market was downbeat when it opened the day's session. The DSEX saw a downward spiral continue until the mid session amid a selling pressure. Later, the trend slowed a bit but no recovery stance was observed. Finally, the DSEX lost more than 86 points or 1.56 per cent to settle at 5,431, lowest since April 27, 2021.
Price erosion experienced by blue chip stocks mainly intensified the fall of the broad index.
Top 10 index draggers jointly wiped out 35.2 points of the broad index. A majority of the losers were blue chip companies, including British American Tobacco Bangladesh Company, Beximco Pharmaceuticals, Renata and Grameenphone.
Of the 30 blue chip stocks, 27 declined. Only four advanced and the remaining three remained unchanged on the DSE.
DS30 index comprising blue chip stocks witnessed a sharp fall of 1.29 per cent or 25.55 points to close at 1948.43 points.
Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), said concerns over high interest rates and depreciation of local currency against the dollar had been driving the index down.
Besides, the status of non-performing loans in the banking sector is very frustrating, he said.
Amid such inherent shocks, news were circulating that ICB Islami Bank could not pay back its clients.
At the same time, high inflation has squeezed people's disposable income significantly leaving a negative impact on the capital market.
"Nothing is in favour of the capital market," Mr Islam said.
This is the backdrop against which the revenue board has reportedly decided to impose capital gain tax on individual investors.
"First of all, we do not want such a tax. Secondly, small and retail investors should be kept out of the purview of the capital gain tax," said Mr Islam, adding that a clarification is needed from the revenue board.
He, however, expressed optimism, saying that the market will bounce back with policy support and a recovery of the economy.
Meanwhile, due to lower investor participation, the daily turnover went below Tk 5 billion for the first time since April 21. Share transactions were worth Tk 4.09 billion on Sunday.
Of the 388 issues traded, 22 advanced, 347 declined and 19 were unchanged on the DSE.
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