Dhaka stocks declined last week in volatile trading with a significant decline in turnover as investors were demoralised following remarks made by the government high-ups in the previous week. The key index of Dhaka Stock Exchange, DSEX, finished at 4,328.4 points, shedding 2.82 per cent or 80.40 points. Daily average turnover of the bourse dropped to Tk 279.39 crore last week from the previous week’s figure of Tk 419.01 crore.
Finance minister AMA Muhith after holding a meeting with the stock market operators on June 12 had told reporters that many of the country’s share market investors were ‘touts’.
‘Along with investors’ dissatisfaction regarding the proposed budget, the latest comment made by the finance minister might have intensified pessimism among investors as they have felt that the government insulted them by terming them “touts”,’ Mohammad Musa, professor (School of Business) at United International University, told New Age.
Besides, investors might be thinking that the government is neglecting stock market investors due to the imposition of some new tax burden on the capital market and its investors in the proposed budget for the fiscal year 2014-2015, market operators said.
The proposed finance bill for the financial year 2014-2015 imposed 3-5 per cent gain tax on individual investors who will earn Tk 10 lakh or more from the capital market.
The market in the immediate next trading session of the budget proposal witnessed instant reaction as the key index had declined by 96 points within first two hours of trading, they said.
Due to the sudden jolt in the market, the officials of the Bangladesh Securities and Exchange Commission and the bourses met with the finance minister more than once to make him understand about the budgetary impact on the capital market.
They also requested Muhith to withdraw the newly-imposed gain tax on individuals’ earning from the capital market.
Muhith following the request said that the government would decide the matter before the final approval of the budget.
The comment made investors sceptical about the gain tax issue and subsequently pushed investors onto the sideline from trading, said operators.
Market operators also said that the next course of the market would depend on the government’s decision on the newly-imposed gain tax.
DS30, the blue-chip index of the bourse, fell by 2.11 per cent, or 34.62 points, last week to close at 1,603.46 points on Thursday, last trading day of the week.
The Shariah index of DSE, DSES, finished at 992.97 points, shedding 2.48 per cent or 25.27 points last week.
‘Coupled with substantial profit booking and erosion in confidence amid investors, the bourse faced significant downtrend, this [last] week,’ IDLC Investments said in its daily market commentary.
As a consolidated view, overall market faced significant correction and passed a week full of dullness, it said.
‘Additionally, some positive news especially Padma Bridge contract signing could not lure investors much. Aftermath, participation slid day by day,’ said IDLC.
It said, ‘Overall market level sentiment deteriorated, significantly and put investors in a tight spot of indecisiveness.’
Lafarge Surma Cement led the turnover leaders with its shares worth Tk 116.52 crore changing hands.
Grameenphone, BSRM Steels, Peninsula Chittagong, Square Pharma, BEXIMCO, Bangladesh Submarine Cable Company, Heidelberg Cement, MJL Bangladesh and Mithun Knitting were among the other turnover leaders.
BEXIMCO gained the most in the week with a 9.35-per cent increase in its share price, while Renwick Jajneswar declined the most, shedding 12.83 per cent.
-With New Age input
