Fiscal hopes keep stocks afloat

Stocks extended the winning streak for a second consecutive week through Thursday as bargain hunters placed new bets on selective issues, keeping an eye on the national budget.

Finance Minister AHM Mustafa Kamal on Thursday unveiled a budget of Tk 6.78 trillion for the financial year 2022-2023.

This week saw five trading days as usual, with three sessions ending down and two up.

Week on week, DSEX, the key index of the Dhaka Stock Exchange (DSE), climbed 28.77 points or 0.45% to settle at 6,480.30. The DSEX has climbed over 242 points in the past two weeks.

Market analysts said regulatory initiatives as well as positive national budget expectations could encourage investors to bet on lucrative stocks.

“Positive regulatory initiatives and the anticipation of a capital market-friendly fiscal statement kept investors hopeful,” EBL Securities said.

However, the overall macroeconomic scenarios continue to be a matter of concern, he added.

Investors showed their buying appetite for general insurance, bank and non-bank financial institution issues throughout the week, according to International Leasing Securities.

Investors were taking a stand on sector issues anticipating a corporate tax cut in the national budget, the stockbroker said.

The Minister of Finance has proposed a 2.5% reduction in corporate tax for listed and unlisted companies in the draft budget for the financial year 2022-23, provided that all receipts and income are processed by bank transfer.

The Minister of Finance has proposed a tax rate of 20% instead of the existing 22.5% for listed companies that issue shares worth more than 10% of their paid-up capital through a first call public savings.

However, the tax rate will remain at 22.5% for listed companies that issue shares worth 10% or less than 10% of their paid-up capital.

“The corporate tax cut for listed companies will have a positive impact on the market,” a DSE official said.

However, the tax gap would remain unchanged for listed and unlisted companies at 7.50%, which analysts said would discourage unlisted companies from going public.

Stock market intermediaries have long pushed to widen the tax gap between listed and unlisted companies to at least 10% to attract successful companies to the market.

This week, the general insurance sector recorded a phenomenal gain of 11.3 on anticipation of the introduction of “bancassurance” in the country.

The banking, electricity, financial institutions and telecommunications sectors also gained 2.0%, 0.80%, 0.80% and 0.80% respectively.

The total turnover for the week also reached 43.42 billion taka on the main exchange against 39.26 billion taka the previous week.

Daily turnover averaged 8.68 billion taka, up 10.59 percent from the previous week’s average of 7.85 billion taka.

Two other indices also ended up. The DS30 index, composed of blue chips, advanced 3.30 points to end at 2,352.38 while the DSE Shariah Index (DSES) gained 1.98 points to close at 1,413.76.

Of 389 issues traded, 206 advanced, 157 declined and 26 remained unchanged.

Paramount Insurance was the week’s biggest gainer, posting a 26.41% gain, while Trust Bank was the worst loser, losing 12.34%.

The Chittagong Stock Exchange (CSE) also rose with the CSE All Share Price Index (CASPI) rising 134 points to 19,025 and its Selective Categories Index (CSCX) gaining 81 points to close the week at 11,410.

Of the issues traded, 197 advanced, 132 declined and 25 issues remained unchanged on the CSE trading floor.

The port city stock exchange traded 44.51 million shares and mutual fund units with a turnover value of 1.30 billion taka.

Meghna Insurance, meanwhile, made a blistering trading debut on Wednesday as its shares closed at Tk 12.10 each on Thursday, climbing 20% ​​in the two consecutive sessions, from its issue price of Tk 10 each. .

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