Stock investors continue to lose money
Investors have continued to lose money as the budget for the current fiscal year has broadly failed to lift the stock markets and restore confidence.
In the run up to the budget for fiscal 2019-20, Finance Minister AHM Mustafa Kamal had publicly said that there would be something in the new budget to revive the market.
But instead of coming up with measures that could have lifted the markets, the budget proposed a number of moves that went against the interest of the listed companies.
They still had hoped that the finance minister would backtrack when the fiscal plan is approved on June 30, but their hopes were dashed as it was passed in the parliament largely unchanged.
The gas price hike a day after the budget was passed dealt another blow as the cost of production of the listed companies in the sectors such as textile, steel and ceramics would go up. Many of these stocks fell.
Yesterday, the stocks tumbled because of the gas price hike and the budgetary measures geared towards the listed companies. The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), plummeted 47.70 points, or 0.88 percent, finishing the day at 5,333.08. It has lost 88 points since the budget was passed.
Some ongoing issues have shaken investors’ confidence, causing the market to fall, said UCB Capital, a stock brokerage house, in its daily market commentary.
The issues include the 32.8 percent average hike in gas price and the imposition of tax on the retained earnings and the stock dividend of listed companies.
The resurgence of a row between Grameenphone, the largest stock, and the government, also contributed to the fall.
On Thursday, the Bangladesh Telecommunication Regulatory Commission directed the international gateway operators to cut the international internet bandwidth for GP by 30 percent and for Robi by 15 percent on account of non-payment of dues.
In reaction, GP said that the move is illegal and it will seek intervention of courts.
In the meantime, the company lost 2.2 percent of its market capitalisation, the brokerage house added.
A top official of an asset management company said the market has been falling mostly because the new budget has failed to boost investors’ confidence. “In fact, it dented investors’ confidence in some cases.”
Turnover, another important indicator, plunged 18.2 percent to Tk 415.33 crore on the DSE.
Of the traded issues, 87 securities advanced, 239 declined and 27 closed unchanged on the premier bourse.
JMI Syringes dominated the turnover chart with 2.68 lakh shares worth Tk 13.09 crore changing hands, followed by Asian Tiger Sandhani Life Growth Fund, Runner Automobiles, National Life Insurance, and Rupali Insurance.
CAPM BDBL Mutual Fund One was the day’s best performer with 10 percent gains, while Global Insurance was the worst loser, shedding 7.64 percent.
Chattogram stocks also dropped with the bourse’s benchmark index, CSCX, declining 81.79 points, or 0.81 percent, to finish at 9,902.99.
Losers beat gainers as 162 issues declined, 78 advanced and 25 finished unchanged on the Chittagong Stock Exchange.
