Stocks drifted lower in the first week after unveiling the national budget as investors were not happy with the budgetary measures on the capital market.
Week on week, DSEX, the key index of Dhaka Stock Exchange (DSE), shed 54.56 points or 0.84 per cent to settle at 6,425.74, after gaining over 242 points in the past two weeks.
The week saw five trading days with the first three sessions ending sharply lower while the last two closed higher riding on the finance minister's latest remark on stock market.
Finance Minister AHM Mustafa Kamal Wednesday said the stock market would make a turn around when the new budget implementation begins.
Earlier on June 9, the finance minister placed a record Tk 6.78 trillion national budget for the fiscal year (FY) 2022-23 before the parliament.
Market operators said the investors are not happy with the budgetary measures on the capital market while instability of exchange rates, rising inflation and upsurge in call money rate made investors cautious.
The new budget has proposed no new incentives, other than the reduction in corporate tax for the listed companies on some conditions.
Moreover, the tax gap between listed and non-listed firms remained unchanged at 7.50 per cent which analysts think would discourage non-listed firms from going public.
"The investors reacted negatively to the proposed budget as the budget proposed conditional tax reduction for the listed companies," said a merchant banker.
The investors went for sell-offs in the first three days while the last two went for bargain hunting on major sector issues as their shares became lucrative following the recent price erosion, he said.
He noted that some investors are also analysing the potential impacts on the capital market with caution before making any more investments.
The market witnessed a massive fall of 119 points on the first three days of the week as the budget failed to meet the investors' expectations. However, it bounced back in the last two days as the bargain hunters put fresh bets on stocks at lucrative prices, said International Leasing Securities.
"Some of the stocks got investors' attention later in the week due to the budgetary incentives," said International Leasing Securities.
The concerns about inflation and foreign exchange rate are still growing considering the global economic turmoil, said the stockbroker.
The declared national budget has been unable to meet the investors' expectations and the volatile macroeconomic outlook has compelled the majority of the investors to stay cautious, said EBL Securities, in its weekly analysis.
Two other indices also ended lower with the DSE 30 Index, comprising blue chips, losing 24.44 points to finish at 2,327 and the DSE Shariah Index (DSES) falling 10.49 points to close at 1,403.
Most sectors faced price correction with general insurance losing the most of 5.20 per cent, followed by cement 1.60 per cent, banking 1.40 per cent, food 1.30 per cent, telecom 0.70 per cent and pharma 0.60 per cent.
On the other hand, the ceramic sector witnessed a phenomenal gain of 10.70 per cent over the week, followed by cement with 3.40 per cent, services & real estate 3.40 per cent and travel & leisure 1.30 per cent.
Losers took a strong lead over the gainers, as out of 389 issues traded, 251 declined, 117 advanced and 21 remained unchanged on the DSE trading floor.
The week's total turnover stood at Tk 43 billion on the prime bourse as against Tk 43.42 billion in the week before.
The daily turnover averaged out at Tk 8.60 billion, down by 0.96 per cent from the previous week's average of Tk 8.68 billion.
Newly listed Meghna Insurance was the week's top gainer, posting a 59.50 per cent gain, while Bangladesh General Insurance Company was the worst loser, losing 9.33 per cent.
The Chittagong Stock Exchange (CSE) also ended lower after two weeks with the CSE All Share Price Index (CASPI) losing 127 points to settle at 18,898 and its Selective Categories Index (CSCX) shedding 80 points to close the week at 11,410.
Of the issues traded, 199 declined, 125 advanced and 23 issues remained unchanged on the CSE trading floor.
The port-city bourse traded 82.95 million shares and mutual fund units with turnover value of Tk 2.50 billion.
