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Dhaka stocks edge up further on tax review hope

FE Online Report | Published: June 19, 2019 16:07:27 | Updated: June 21, 2019 10:47:34


Stocks ended marginally higher for the second day in a row on Wednesday as investor showed their buying appetite on tax review expectations.

DSEX, the prime index of the Dhaka Stock Exchange (DSE), settle at 5,411, gaining 11.16 points over the previous day.

Market analysts said investors went for buying shares with an expectation that the government might review 15 per cent tax imposed on listed companies’ reserve and retained earnings in the proposed budget.

A leading broker said possibility to review the proposed tax on listed companies’ reserve and retained earnings made investors hopeful.

The National Board of Revenue (NBR) chairman hinted at the possibility of reviewing the proposal of the budget for fiscal year (FY) 2019-20.

The market stakeholders also criticized strongly over the proposed tax on stock dividend and retained earnings which prompted the authorities concerned to weigh the scope for reviewing the measure.

The Bangladesh Securities and Exchange Commission (BSEC) said on Monday it would sit with the finance minister (FM) and the NBR chairman to discuss the issue.

The Finance Minister AHM Mustafa Kamal proposed, among other, imposition of 15 per cent additional tax on retained earnings and reserves, if the amount exceeds 50 per cent of the paid-up capital of the company.

The budget 2019-20 also proposed imposing 15 per cent tax on stock dividend to promote cash dividend as part of efforts to increase money flow into the stock market.

Two other indices also ended marginally higher. The DS30 index, comprising blue chips, advanced 2.70 points to finish at 1,897 and the DSE Shariah Index gained 2.78 points to close at 1,235.

Turnover, another important indicator of the market, stood at Tk 5.54 billion, which was 5.0 per cent higher than the previous day’s turnover of Tk 5.28 billion.

A total number of 139,036 trades were executed in the day’s trading session with trading volume of 161.70 million securities.

The market capitalisation of the DSE also rose to Tk 3,989 billion on Wednesday, from Tk 3,984 billion in the previous session.

The losers, however, took a modest lead over the gainers, as out of 351 issues traded, 174 declined, 124 advanced and 53 issues remained unchanged on the DSE trading floor.

Rupali Life Insurance was the day’s best performer, posting a gain of 9.95 per cent while Northern Insurance was the worst loser, losing 6.52 per cent.

However, the port city bourse, Chittagong Stock Exchange, ended marginally lower with its CSE All Share Price Index – CASPI –losing 9.58 points to settle at 16,565 and the Selective Categories Index - CSCX –shedding 6.24 points to finish at 10,038.

Here too, the losers beat gainers, as 141 issues closed lower, 104 ended higher and 22 remained unchanged on the CSE trading floor.

The port city bourse traded 8.74 million shares and mutual fund units worth Tk 355 million in turnover.

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