Stocks open lower as budgetary measures fail to meet investors’ expectations

The market opened lower on Sunday, the first session after unveiling the national budget, as investors were not happy with the budgetary measures on the capital market.

Market operators said the investors reacted negatively to the proposed budget as the budgetary measures failed to meet investors’ expectations while instability of exchange rates, rising inflation and upsurge made investors cautious.

Following the previous day’s marginal gain, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 33 points or 0.63 per cent to reach 5204 after the first hour of trading at 11:00am when the report was filed.

Finance Minister Abul Hassan Mahmood Ali on Thursday placed a record Tk 7.97 trillion national budget for FY25 when the stock market is passing through a critical time due to lingering macroeconomic challenges.

The finance minister proposed a capital gain tax exceeding Tk 5 million for individual investors at least 15 per cent for the first time, which aligns with International Monetary Fund (IMF) recommendations to enhance revenue collection.

The budget also proposed undisclosed money into securities, apartments, and lands with a one-off payment of 15 per cent tax without a question about the source of income, and narrowed the tax gap between listed and non-listed companies.

The Finance Minister also proposed the corporate tax rate for publicly traded companies remain unchanged while tax rate for not-listed companies reduce 2.5 per cent to 25 per cent with conditions, narrowing the gap between listed and non-listed companies to 5 per cent.

Many investors were also cautiously analysing the proposed budget before making any further investment decisions, said a leading broker.

The DS30 index, comprising blue chips, also lost 13 points to reach 1,845 and the Shariah Index (DSES) shed 6 points to stand at 1,130 till then.

Turnover, another important indicator of the market, stood at Tk 1.10 billion after the first hour of trading.

Of the issues traded till then, 248 declined, 80 advanced, and 51 remained unchanged on the DSE trading floor.

Lovello Ice-Cream was the most traded stock till the filing of this report with shares worth Tk 88 million changing hands, closely followed by Fortune Shoes, Asiatic Lab and Central Pharma.

The port city bourse – the Chittagong Stock Exchange – (CSE) also opened lower with CSE All Share Price Index- CASPI-losing 58 points to stand at 18,888, also at 11:00am.

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