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Stocks fall on possible tax rebate withdrawal from secondary market

Staff Correspondent
12 May 2023 00:00:00 | Update: 12 May 2023 00:25:45
Stocks fall on possible tax rebate withdrawal from secondary market

Dhaka stocks failed to stay afloat in the week’s last trading session on Thursday owing to investors’ cautious selling approach amid concerns regarding the possible withdrawal of tax rebates from investments in secondary stocks in the upcoming budget for the fiscal year 2022-23.

Some media, citing the finance ministry, carried news reports yesterday that the government was now contemplating removing tax rebates on investments made in the secondary stock market.

Currently, taxpayers are eligible for a 15 per cent rebate on their investments up to a maximum of 20 per cent of their taxable income in the stock market.

DSEX, the benchmark index of the prime bourse Dhaka Stock Exchange (DSE), declined 6.7 points to settle at 6,272 against 6,279 in the previous trading session.

Turnover, another important market indicator, however, surged by 10.6 per cent to Tk 798 crore against the tally of Tk 721 crore in the previous session.

The market remained afloat till mid-session, but a subsequent dominant selling pressure ultimately led the core index to dip into negative territory yesterday, said EBL Securities, a stockbroker, in its daily market review.

Defying the market’s current uptrend, cautious investors kept profit booking and portfolio rebalancing in fear of possible macroeconomic concerns, it added.

Moreover, investors reacted negatively to the recent NBR proposal of the withdrawal of tax rebates from investments in secondary market, another vital reason behind the decline in the core index, EBL Securities continued.

The food and allied sector topped the turnover chart with a contribution of 12.2 per cent of the total turnover of the DSE, followed by pharma (10.7 per cent) and IT (9.9 per cent).

Most sectors displayed mixed returns, with the services displaying the highest gain of 1.3 per cent, followed by general insurance (1.2 per cent) and tannery (0.6 per cent). On the other hand, the travel sector faced the highest correction of 3.8 per cent, followed by IT (1.5 per cent) and cement (1.1 per cent).

Out of the issues traded, 86 advanced, 74 declined and 233 remained unchanged on the DSE trading floor.

Agrani Insurance Co Ltd topped the DSE’s gainer chart with a return of 11.8 per cent, while Sea Pearl Beach Resort & Spa Limited was the day’s worst sufferer with a loss of 8.1 per cent.

The port city bourse, CSE, also settled on red terrain, with its two major indices – the selected indices (CSCX) and the all-share price index (CASPI) – declined by 7.6 points and 13.0 points respectively.