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Stocks slip into red despite tax review news

DSE turnover dips below Tk 5.0b-mark again

FE Report | July 01, 2019 00:00:00

Stocks posted a marginal fall on Sunday, the last session of the outgoing fiscal year, despite the government reduced tax on retained earnings.

Parliament on Saturday passed the tax measures for the fiscal year (FY) 2019-20, reducing tax on retained earnings and reserves of companies to 10 per cent from initially-proposed 15 per cent in the face of outcry from businesses.

Listed companies will also have to pay cash dividend equal to the ratio of stock dividend. If the ratio of stock dividend is higher than the cash dividend, the company will have to pay 10 per cent tax on stock dividend.

Investors expressed mixed reaction as some argued that the step would discourage business expansion while some said the retail investors will be benefited.

A leading stockbroker said the market slipped into the red as most of the investors were analyzing the possible impact on stock market.

After witnessing volatility throughout the session, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 8.42 points or 0.15 per cent to finish at 5,421.

The DSE Shariah Index also fell 1.13 points to close at 1,244. However, the DS30 index, comprising blue chips, advanced 4.18 points to finish at 1,929.

Turnover, another important indicator of the market, stood at Tk 4.69 billion, which was 9.0 per cent lower than the previous day's turnover of Tk 5.17 billion.

According to International Leasing Securities, the investor's booked quick-gain after the parliament approved finance bill with some amendments of proposed issued for capital market.

EBL Securities said most of the investors watchful ahead of earnings and corporate declarations from listed corporations.

Food & allied sector booked the highest gain of 0.83 per cent, followed by pharmaceuticals 0.55 per cent and engineering 0.24 per cent.

Power witnessed the highest loss of 0.73 per cent, followed by non-bank financial institutions 0.62 per cent, banking 0.47 per cent and telecommunication 0.35 per cent.

A total number of 125,561 trades were executed in the day's trading session with trading volume of 129.30 million securities.

The market capitalisation of the DSE also fell to Tk 3,998 billion on Sunday, from Tk 4,004 billion in the previous session.

The losers took a modest lead over the gainers as out of 353 issues traded, 175 declined, 122 advanced and 56 issues remained unchanged on the DSE trading floor.

HR Textile was the day's best performer, posting a gain of 9.95 cent while First Finance was the worst loser, losing 11.76 per cent following the news of its 'no' dividend declaration.

The port city bourse, Chittagong Stock Exchange, also ended lower with its CSE All Share Price Index - CASPI -shedding 8.38 points to settle at 16,634 and the Selective Categories Index - CSCX -losing 1.53 points to finish at 10,084.

Here too, the losers beat gainers, as 129 issues closed lower, 96 higher and 40 remained unchanged on the CSE trading floor.

The port city bourse traded 28.69 million shares and mutual fund units worth Tk 1.13 billion in turnover.

Trading on bourses will remain closed today (Monday) due to Bank Holiday.

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