Stock investors are still reeling from Finance Minister AHM Mustafa Kamal’s maiden budget 12 days on, with the Dhaka Stock Exchange losing Tk 13,201 crore since fiscal 2019-20’s budget was passed in the parliament.
In the budget for fiscal 2019-20, a 10 percent tax has been prescribed for companies that give out stock dividend and holds on to more than 70 percent of their earnings in a year -- moves that deter capital formation, according to analysts.
Subsequently, DSEX, the benchmark index of the DSE, fell on each day save for one since.
At the close of trade yesterday DSEX stood at 5,222.30 points, down 199 points June 30, when the budget was passed in the parliament.
“Stock investors are not happy with the measures as listed companies are being burdened with more tax,” said Abu Ahmed, a capital market analyst and a former chairman of the Dhaka University’s economics department.
The telecom regulators’ strict stance towards Grameenphone, which has the largest market capitalisation, the impending liquidation of Peoples’ Leasing and Financial Services (PLFS) also had an impact, he said.
For instance, Grameenphone shed 7.8 percent during the week, in a huge blow for the index, according to UCB Capital, one of the leading brokerage houses.
PLFS’s liquidation has hit the non-bank financial institutions sector. For instance, the NBFIs lost 1.1 percent.
The gas price hike on June 30 also hit the listed companies, it added.
The money market has a shortage of liquid money and it may intensify further, said a top official of a leading merchant bank.
“So, most of the institutional investors are not investing now,” he added.
Turnover, another important indicator of the stock market’s vitality, dropped 14.1 percent yesterday to Tk 351.08 crore.
National Life Insurance was the top traded stock with its transaction of 7.45 lakh shares worth Tk 18.89 crore, followed by Federal Insurance, Grameenphone, Rupali Insurance and Monno Ceramics.
SEML FBLSL Growth Fund, one of the mutual funds, was the day’s best performer, posting a 10 percent gain, while United Airways was the biggest loser, shedding 10 percent.
Losers outnumbered gainers by 1219 to 108, while 26 securities remained unchanged.
The Chittagong Stock Exchange also fell with its key index declining 29.83 points to finish at 9,698.01.
The port city bourse traded 59.87 lakh shares and mutual fund units worth Tk 12.21 crore.