Stocks see volatility on budget day

Stocks ended flat amid volatility on Thursday when the national budget was announced for the new fiscal year beginning from July.

In line with the previous session, the market set off positively in the morning, giving up early gains as days progressed before ending marginally lower on late-profit booking sale pressure.

The benchmark DSEX index edged almost 4 points down to close at 6,480, hitting a high of 6,512 and a low of 6,474.

Stocks tend to see huge gyration on the budget day as investors decipher the impact of the various announcements made by the finance minister.

Investors usually brace for volatility on the budget day as there was nervousness on the day, dealers say.

Finance Minister AHM Mustafa Kamal announced a corporate tax cut in order to boost the economy after the setbacks caused by the pandemic and the war in Ukraine.

He proposed to cut corporate tax by a 2.5 percentage point to 27.5 per cent from the existing 30 per cent for the non-listed companies in the new fiscal year.

For the listed companies, the minister proposed a tax rate of 20 per cent from existing 22.5 per cent for listed companies that issue shares worth more than 10 percent of its paid-up capital through an initial public offering.

“Dhaka stocks ended lower, attributed to late hour sell pressure, as investors decided to realize some profit after Budget 2022-23 optimism had led some stocks to rise,” said the EBL Securities in a note.

Moreover, favorable regulatory interventions and budgetary concessions for sector-specific issues may create opportunities for prudent investors in upcoming sessions, it said.

The market witnessed a considerable decrease in participation as investors were cautious on the budget day. The DSE turnover stood at over Tk 760 crore, sharply down 17.5 per cent from Wednesday’s Tk 920 crore.

Of the heavyweight sectors, telecommunication sector shined led by Bangladesh Submarine Cable Company Ltd (+ 3.90 per cent), Grameenphone (+ 1 per cent), and Robi (+0.1 per cent).

Insurance sector was the worst performer falling more than 1 per cent led by Union Insurance declining more than 7 per cent. Out of the top ten losers, eight came from the insurance sector.

The port city bourse, CSE, however, settled in green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) have inched up by 1.4 and 1.9 points respectively.