Stocks soar ahead of budget declaration

Stocks returned to a gaining streak at both bourses last week as investors showed their buying spree on sector-wise securities ahead of the announcement of the national budget for fiscal year 2019-20. Market analysts said the government has taken up some market-supportive measures to bring back investors’ confidence.

These steps will help rebound the capital market after the budget for the next fiscal is passed in the parliament, they expressed hope. The investors are focusing on large-cap shares, especially banking, telecoms, power sectors, amid expectations that the market would maintain its upward trend after Eid holidays, they observed.

They said the share market came back to gaining steak amid investors' expectation of a market-supportive budget declaration alongside the news of the securities regulators’ move to review the public issue rules. Currently, up to Tk 25,000 of the dividend, announced by the listed companies of the stock exchange, is free of income tax and this amount is being almost doubled in the next budget, finance ministry sources said.

If this proposal is approved, the investors in stock market will be benefitted and share market will be much more active, they said. Finance Minister AHM Mustafa Kamal is going to place the national budget for fiscal year (FY) 2019-20 in the national parliament on June 13 with some market-supportive measures, which will help rebound the market strongly, they expect.

DSEX, the prime index of the Dhaka Stock Exchange (DSE) went up by 127 points or 2.42 percent to close at 5,377 points on Thursday over that the previous week. The DS30 index, comprising blue chips, also increased by 43.78 points to close at 1,876 points while the DSE Shariah Index fell by 21.36 points to settle at 1,214 points.

The market capitalisation of the DSE increased to Tk3,941 billion on Thursday, which was 2.15 percent higher against Tk 3,858 billion on the first working day of the week. Total turnover went up to Tk 18.41 billion last week from Tk17.93 billion in the previous week. The daily turnover increased by 2.70 percent to Tk 3.68 billion over the previous week's average of Tk3.58 billion. Out of 352 issues traded, 199 ended higher, 113 closed lower and 40 remained unchanged on the DSE floor.

The BRAC Bank dominated and became the top on the weekly turnover chart with 1.91 million shares worth Tk643 billion changing hands. It was followed by National Life Insurance, BATBC, Square Pharmaceuticals and New Line Clothings. The National Life Insurance was the week’s best performer, posting a gain of 21.56 percent while the Meghna Condensed Milk, the week’s worst loser falling 15.60 percent.

Meanwhile, the port city bourse, the Chattogram Stock Exchange (CSE) saw positive trend during the last week with its selective category index (CSCX) gaining nearly 208points to close at 9,916 points. On the other hand, all Share Price Index of the CSE was higher by almost 334 points to 16,375 points on Thursday.