Market reacts negatively to anti-stock market measures in the new budget, with significant declines in both DSE and CSE indices
B Mirror Desk:
Following the announcement of the proposed budget for the next fiscal year 2024-25, the country’s stock market experienced a significant downturn on Sunday. The Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) saw a substantial decline across all price indices, accompanied by a marked decrease in the share and unit prices of most companies. The total transaction value on the DSE also dropped to Tk 300 crore.
Market analysts have attributed the downturn to the lack of favorable provisions for the stock market in the proposed budget. The budget introduces a tax on capital gains exceeding Tk 50 lakh for individual investors and reduces the corporate tax rate for non-listed companies. This adjustment further narrows the tax rate gap between listed and non-listed companies, exacerbating investor concerns and contributing to the market’s decline.
On the first working day after the budget proposal, trading commenced with a sharp decrease in the prices of shares and units for the majority of companies. This negative trend persisted throughout the day, culminating in an even greater decline by the close of trading.
At the end of the trading day, only 33 companies on the DSE reported price increases, while 340 companies saw their prices fall, and 19 companies’ prices remained unchanged. Consequently, the DSE’s main index, DSEX, dropped by 65 points to settle at 5,171 points. The DSE Shariah index fell by 15 points to 1,120 points, and the DSE-30 index, which comprises 30 select companies, decreased by 22 points to 1,835 points.
Throughout the day, the market recorded transactions totaling Tk 357 crore 90 lakhs, a significant drop from the Tk 542 crore 60 lakhs traded on the previous working day. This represents a decrease of Tk 184 crore 70 lakhs in trading volume.
Lovello Ice Cream emerged as the most traded stock, with 15 crore 91 lakh shares changing hands. Fortune Shoes followed with shares worth Tk 15 crore 14 lakhs traded, and Asiatic Laboratories came in third with a transaction value of Tk 13 crore 8 lakh. The top 10 most traded companies on the DSE also included Unilever Consumer Care, Central Pharmaceuticals, E-Generation, Square Pharmaceuticals, Rupali Life Insurance, Orion Pharma, and British American Tobacco.
Similarly, the Chittagong Stock Exchange (CSE) saw its overall price index, CASPI, decrease by 106 points. Out of the 217 firms participating in the market, 34 saw price increases, while 151 experienced price declines, and 32 remained unchanged. The total trading value on the CSE amounted to Tk 107 crore 82 lakhs.
The budget’s perceived anti-stock market stance has clearly rattled investors, leading to a sharp sell-off and significant declines across the board in both major stock exchanges.
