Dhaka, Bangladesh (BBN) – The first week after budget proposal, Bangladesh’s stocks ended flat amid high volatility as higher capital gain tax imposition in the proposed budget disappointed the investors most.
Week-on-week, DSEX, the prime index of Dhaka Stock Exchange (DSE) went up by 12.26 points or 0.28 percent to close at 4,408.80 points.
The DS30, comprising blue chips, gained 15.13 points or 0.93 percent to close at 1,638.08 points. The DSE Shariah Index (DSES) went up by 10.41 points or 1.03 percent to close at 1,018.24 points.
The port city bourse, the Chittagong Stock Exchange (CSE) also inched up last week with its Selective Categories Index (CSCX) gained 76.36 points or 0.92 per cent to close the week at 8,410.43 points.
The total turnover of the week amounted to BDT 20.95 billion on DSE which was BDT 20.29 billion in the previous week.
The average daily turnover for the week stood at BDT 4.19 billion, registering an increase of 3.26 percent over the previous week’s average of BDT 4.06 billion.
Lankabangla Securities, in its weekly market analysis, said, “Budget proposal of FY’15 cannot be said capital market friendly. Investors did not perceive the inauguration of capital gain tax at the individual level favorable for them”.
Timing of introduction of such tax is not appropriate, as market sentiment is very shaky now. Withdrawal of the provision for 10 per cent tax rebate for companies declaring more than 20 per cent dividend is also very discouraging, said the stock broker.
“Proposed national budget for the fiscal year 2014-15, expectation mismatch and their consequential impact sustained throughout the week,” IDLC Investments, said in its weekly market analysis
Higher capital gain tax imposition disappointed the investors most, psychologically, said the merchant bank.
Resultantly, cyclicality prompted and changed the mode of investments. The investors swapped across cap segments, looking for lucrative hunt, said the merchant bank.
The investors also started changing preference across sectors and stocks. Some large caps shuffled their phases, especially Lafarge Surma Cement’s interim dividend disclosure concentrated investors mostly on it to be in a selling mood, the merchant bank said.
They started focusing on telecommunications, especially GP, entering in a gaining streak throughout the week and GP gained 4.69 per cent alone, it said.
Out of 302 issues traded during the week, 147 advanced, 148 declined and four issues remained unchanged on the DSE floor.
Telecommunications posted the highest gain of 4.59 per cent in the week which was largely attributed to the recent rally of GP. GP gained 4.69 per cent alone. Non-banking financial institutions (NBFIs) followed next gaining 2.14 per cent. Pharmaceuticals and fuel and power advanced 1.24 per cent and 1.04 per cent respectively.
Two listed companies – Lafarge Surma Cement and Asia insurance made corporate declaration during the week. Lafarge Surma Cement declared 5.0 percent interim cash dividend while Asia Insurance recommended 15 per cent cash and 5.0 percent stock dividend.
Lafarge Surma Cement dominated the week’s top turnover chart with shares worth BDT 2.08 billion changing hands during the week followed by GP, BSRM Steels Square Pharmaceuticals and MJL BD.
Al-Haj Textile was the week’s top gainer, posting a rise of 14.68 percent while Wata Chemicals was the week’s worst loser, slumping by 19.95 percent.
BBN/BB/SI-14June14-12:46pm (BST)
