Stimulus fails to prop up textile stocks

The textile sector yesterday slipped 0.27 percent despite news of the government's stimulus package for the sector to recoup the losses from political unrest of last year.
The package, which has already been approved by Prime Minister Sheikh Hasina, consists of cash incentives and cutback in export tax to 0.3 percent from 0.8 percent.  
The sector will get cash incentive of 0.25 percent over the value of their exports, while the cash benefit for export to new destinations will be increased to 3 percent from 2 percent now.
Investors see the stimulus package as “insignificant”, said a market analyst.
“They have lost confidence in the sector in the face of downtrend,” he added.
The sector might also face some challenges in light of the recent power hike of around 7 percent, said a stockbroker.
“On top of it, in response to a couple of factory accidents last year, there is an increased awareness among the international buyers. Consequently, manufacturers are facing pressure to improve the safety standards.”
The benchmark general index of the Dhaka Stock Exchange, DSEX, closed the day at 4,519.54 points, after falling 39.38 points or 0.86 percent.