Indices drop as budget fails to meet capital market’s expectations

The proposed budget for fiscal 2022-23 does not have any good news for the capital market except for a corporate tax cut for the listed companies, said people concerned.

They added that because the budget does not reflect their expectations, disappointed investors were in a selling spree on Sunday – the first trading session following the unveiling of the budget on Thursday, causing the indices to fall on both the bourses.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), declined by 48.8 points to settle at 6,431 at the end of Sunday's trading session.

Besides, total turnover on the premier bourse also declined by 16.1% and stood at Tk636.40 crore as against Tk758.26 crore in the previous session amid a lower participation of investors.

Out of the 386 issues traded, 53 advanced, 306 declined, and 27 remained unchanged. 

EBL Securities said in its daily market commentary that Dhaka stocks tumbled as investors were selling off stocks since the fear of tighter financial conditions across the globe has unleashed significant volatilities on equities in the country. 

It also said the market settled down following the unveiling of the record Tk6.78-trillion national budget as investors are cautiously analysing its potential impacts on the capital market before making any new investments. 

Meanwhile, people related to the market have expressed hope that local companies might do well in the future as the government in the FY23 budget has proposed tax cuts for local enterprises as well as duty hikes on imports in order to protect local industries.

According to EBL, on the sectoral front, textile issues grabbed the highest 11.8% of the DSE turnover on Sunday, followed by pharma and chemical 10.7%, and miscellaneous 10.5%.

Meghna Insurance Company was the day's top gainer, posting a 9.92% gain, followed by Monno Fabrics, and Shinepukur Ceramics.

On the other hand, Summit Alliance Port was the worst loser, losing 2% followed by Green Delta Insurance, and Nitol Insurance Company.

The port city bourse, Chittagong Stock Exchange (CSE) also settled in red terrain. The selected indices, CSCX, and All Share Price Index (CASPI) declined by 81.1, and 134.4 points, respectively, on Sunday, compared to the previous session.