Dhaka, Bangladesh (BBN)– Bangladesh’s stocks decreased further on Monday, the second day after unveiling the national budget, as investors were disappointed on some budget proposals.
DSEX, the prime index of the Dhaka Stock Exchange (DSE), settled at 5,375, shedding 55.54 points or 1.02 per cent over the previous session.
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.
The government’s proposal to impose 15 per cent tax on the listed companies’ reserve and stock dividend made investors upsets, according to market operators.
They also said the proposal of 15 per cent extra tax on retained earnings and reserves may be a cause of concern for good companies as they retain profits for future investments.
According to media reports, some 209 listed companies will have to pay an additional BDT 107.92 billion tax if the proposed 15 per cent tax on ‘reserves and retained earnings’ is implemented.
The market opened on downward note and the negative trend continued until end of the session with no sign of reversal.
Two other indices also ended lower. The DS30 index, comprising blue chips, fell 15.70 points to finish at 1,889 and the DSE Shariah Index eroded 11.41 points to close at 1,223.
Turnover, another important indicator of the market, stood at BDT 5.35 billion, remaining almost unchanged over the previous day’s turnover of BDT 5.34 billion.
On the other hand, Chittagong Stock Exchange, also ended lower with its CSE All Share Price Index – CASPI -slumping by 135 points to settle at 16,488 and the Selective Categories Index – CSCX -losing 82 points to finish at 9,991.
The losers beat gainers, as 180 issues closed lower, 69 higher and 21 remained unchanged on the CSE trading floor.
The port city bourse traded 8.57 million shares and mutual fund units worth BDT 339 million in turnover.