Stocks fall as budget dampens investor sentiment

A file photo shows investors watching stock price movements on a computer screen at a brokerage in the capital Dhaka. — New Age Photo

Shares in Dhaka fell last week after gaining in the previous two weeks as investors opted to sell shares after the announcement of the proposed national budget.

Finance Minister AHM Mustafa Kamal tabled the draft national budget for the financial year 2022-23 in parliament on June 9.

The Dhaka Stock Exchange’s key index, DSEX, lost 0.84%, or 54.56 points, over the past week, to close at 6,425.74 points on June 9, the last trading session of the week after earning 242.32 points in the previous two weeks. .

The market lost in most sessions of the five-session week as investors opted to sell stocks after the announcement of the draft national budget, market operators said.

They said that investors had found almost nothing for the development of the exchange in the draft budget which discouraged them.

The budget removed the ability to legalize undisclosed money investing in the stock market, which upset investors, they said.

Investors are also pricing in the country’s macroeconomic issues, including rising inflation, currency market volatility, record trade deficit, interest rates and the cost of external debt, they said.

Government bank borrowing to fill the budget gap is expected to exacerbate a liquidity crisis in the banking system, they said.

EBL Securities, in its weekly market commentary, said: “The proposed national budget failed to meet investor expectations and the volatile macroeconomic outlook forced the majority of investors to remain cautious.”

Average stock prices in the general insurance, banking, food and engineering sectors fell 5.2%, 1.4%, 1.3% and 0.8% respectively.

Of 385 issues traded, 206 advanced, 157 declined and 26 remained unchanged.

The DS30, made up of 30 large-cap companies, rose 24.44 points to end at 2,327.95 points and the DSE Shariah Index, DSES, also lost 10.4 points to close at 1,403.26 points. .

Average daily turnover, a key indicator of investor participation, fell to Tk 860 crore during the week from Tk 868.38 crore the previous week.

Shinepukur Ceramics was the most traded company with its shares worth Tk 236.09 crore changing hands during the week.

Bangladesh Export Import Company, IPDC Finance, JMI Hospital Requisite Manufacturing, RAK Ceramics, Monno Fabrics, BDCOM Online, Bangladesh Shipping Corporation, Salvo Chemical Industry and Bangladesh Finance were the other revenue leaders.

Meghna Insurance Company Limited was the best performer of the week, posting a gain of 59.5%, while Bangladesh General Insurance Company was the worst loser, losing 12.34%.

Comments are closed.