Dhaka stocks saw a sharp drop in past week, marking the second consecutive week of losses, as investors remained cautious due to sudden tax hikes by the government.
The DSEX, the benchmark index of the Dhaka Stock Exchange, fell by 60.51 points, or 1.16 per cent, closing the week at 5,133.92 points after a fall of 5.19 points in the previous week.
The market dropped in all the five trading days over the past week.
On January 9, the interim government raised taxes, duties and VAT on over a hundred goods and services, including essential items such as medicines, LPG and mobile SIM cards, shrugging off high inflationary pressure in the country.
The tax and VAT hikes would eventually worsen the current inflationary pressure in the country, experts said.
National Board of Revenue member Belal Hossain Chowdhury said that the NBR would revise down the VAT and supplementary duty on a number of items, including restaurants, mobile phone usage, internet services and medicine.
EBL Securities, in its weekly market report, said, 鈥楾he shaky investor sentiment was further triggered by apprehension of an impending inflationary pressure following the recent tax hikes, as well as concerns over the effects of stricter loan classification rules in the banking sector from the next quarter.鈥�
The higher interest rates on saving certificates further dampened investor sentiment as investors apprehended potential diversion of investments to the secured tools, according to market operators.
Analysts said that overall market sentiment had remained weak for an extended period, showing no signs of improvement.
Investors remained cautious after the Bangladesh Securities and Exchange Commission imposed hefty fines on several individuals and entities for alleged price manipulation and violations of securities laws.
The average daily turnover on the DSE increased slightly to Tk 378.07 crore from Tk 346.59 crore in the previous week.
Of the 396 issues traded, 109 gained, 263 lost value and 24 remained unchanged.
鈥楢lthough some bargain hunters showed interest in specific stocks for short-term gains, most investors stayed cautious due to uncertain market momentum, upcoming earnings announcements for the recently ended quarter and the upcoming monetary policy statement for the fiscal year鈥檚 second half,鈥� the EBL commentary added.
The DS30 index, which tracks blue-chip stocks, dropped by 30 points, or 1.56 per cent, to close at 1,894.27 points.
The DSE Shariah index lost 11.3 points, or 0.97 per cent, ending at 1,150.64 points.
Fine Foods led the turnover chart, with an average weekly turnover of Tk 13.33 crore.