DSEX, the key index of the Dhaka Stock Exchange (DSE), declined amid lower market participation, resulting from the enduring pessimism pervading the trading floor due to the dampened confidence of investors amidst an uncertain market outlook.
Meanwhile, trading activities remained sluggish, with total turnover falling to a five-month low, decreasing by 30.4 per cent to Tk 306 crore against Tk 440 crore recorded in the previous session.
The prime index dropped by 50.35 points or 0.95 per cent to 5,228.53. The other two indices also ended sharply lower: the DSE 30, comprising blue chips, plunged 16.79 points to finish at 1,869.94, and the Shariah-based index, the DSES, lost 13.59 points to close at 1,138.96.
Most large-cap sectors posted negative performances on Wednesday’s bourse, while NBFI experienced the highest losses at 2.22 per cent. Block trades contributed 10.9 per cent of the overall market turnover. Alif Industries Limited had the most traded share, with a turnover of Tk 14 crore.
Of the 396 issues traded, 64 advanced, 283 declined, and 49 remained unchanged on the Dhaka bourse.
Market insiders attributed the free-fall to numerous factors, such as the increased policy rate and treasury security yields, possible capital gains tax, and rumours of a corporate tax rate hike for listed companies.
The market opened lower, and the downward trend continued until the end of the session with no sign of reversal. Finally, the DSEX fell by over 50 points to 5,228, a fresh 37-month-low since April 2021.
EBL Securities, a brokerage, in its daily market review, said the market remained dominated by sellers throughout the session owing to uncertainties leading up to the national budget declaration, allowing the bears to firm their control across the trading floor.
The review added that nervous investors shied away from taking positions in equities and continued to trim their exposure to capital market investments to escape further losses owing to the prolonged subdued market sentiment, which has shown no sign of revival yet.
Al Amin, a capital market analyst and associate professor of the Department of Accounting and Information Systems at Dhaka University, said, “The news of a tax on capital gains has played a role in the price fall. In Bangladesh, the stock market sees prices increases for a short while but decreases for a long time. That is why ordinary investors cannot make a profit.”
DSE Chairman Professor Dr Hafiz Md Hasan Babu also called for reducing source tax in the upcoming FY25 budget. He proposed decreasing the corporate tax on listed companies by 2.5 per cent to 17.5 per cent from the current 20 per cent.
During a pre-budget press conference on Tuesday, he said, “The corporate tax gap between listed and non-listed companies should be increased from 7.5 per cent to 10 to 12.5 per cent to encourage good companies in the capital market.”
Currently, the corporate tax gap between listed and non-listed companies is 7.5 per cent.
Meanwhile, the port city’s bourse, the Chittagong Stock Exchange, also settled on red terrain as the selected indices, the CSCX and the All-Share-Price-Index, the CASPI, lost 95.4 and 155.8 points, respectively.
