| [ Business ] 2012-03-18
DSE returns to black in a chaotic week
| Dhaka stocks returned to black last week, despite the country being in a state of political turmoil and the presidential election of Dhaka Stock Exchange keeping investors on edge.
DGEN, the benchmark general index of the bourse, closed the week at 4,543.45 points, posting a gain of 198.43 points, or 4.57 per cent, as some foreign investors injected fresh funds into the market.
The index had lost 208.75 points in the previous week following a 708.11-point climb in a four-week bull run.
In last week the average daily turnover of the bourse also increased by 11.88 per cent to Tk 255.76 crore from that of Tk 228.61 crore in the week before.
Market operators said the first two days of the week saw investors infused with an apprehension of political instability as the government took a hard stance against the March 12 ‘grand’ rally called by the main opposition Bangladesh Nationalist Party and its allies.
Tension over the elections of four directors and then the president of the bourse also dominated the market last week, they said.
According to the operators, investors had been confused too about the compensation announced by the government on March 4 of 50 per cent waiver of margin loan interest accrued in last year.
As the merchant banks and brokerage houses concerned could not come up with a detailed implementation plan of the scheme, investors’ optimism about the compensation turned into confusion, they added.
After a week-long buzz, on Thursday evening, Midway Security’s managing director Rakibur Rahman was elected the new DSE president for a one-year term.
Earlier on Monday, election was held of four new members of the DSE board of directors for the next three years.
Market insiders said the government order to reinstate tax rebate for stock market investors was one of the key factors that brought about last week’s rise, while several worries kept investors on their toes.
The National Board of Revenue on Sunday issued two gazette notifications — one of resumption of 10 per cent income tax rebate for investors in stocks and the second of scrapping the capital gain tax imposed on foreign investors.
Of the 269 issues traded in the week, 239 advanced, 24 declined, and six remained unchanged.
Fuel and power stocks were the most appreciated ones last week with both the sectors posting the highest gain of 7.31 per cent.
Food and allied was the only sector to lose last week, dropping by 4.04 per cent following BATBC’s adjustment on Thursday after record date for cash dividend.
Among other sectors, telecommunication gained 6.01 per cent, non-bank financial institutions 5.20 per cent, pharmaceuticals 4.22 per cent, and bank 3.49 per cent.
The situation was mixed on the macroeconomic front in last week.
Finance minister Abul Maal Abdul Muhith announced that the government’s subsidy spending would almost double in the revised budget for the current fiscal year.
The subsidy in different areas including fuel, electricity and agriculture is expected to rise to 4.3 per cent of the gross domestic product from the original allocation of 2.3 per cent.
The BDT/USD exchange rate had remained stable in last week at Tk 81.77 per dollar.
The foreign trade figures showed a 13 per cent growth of export receipts and a 13.6 per cent decline of import payments in July-February of the current fiscal year over the same period of the preceding fiscal.
The DSE started the week with a losing day that saw the DGEN shedding 0.62 per cent, or 27.09 points.
The market turned around on Monday, gaining 0.75 per cent, or 32.55 points, followed by a sharp rise of 3.98 per cent, or 173.24 points, on Tuesday.
The DGEN lost 0.28 per cent, or 12.80 points, on Wednesday and closed the week on Thursday, gaining 0.72 per cent, or 32.54 points.