Stocks jump as tax cut keeps investors upbeat

Nearly all stock indexes in Bangladesh rose sharply for a second consecutive day yesterday as investors were upbeat following a substantial cut in capital gains tax by the National Board of Revenue (NBR) on Monday.
The capital gains tax rate has been reduced by half to 15 percent on earnings of over Tk 50 lakh from share sales.
The premier index of Dhaka Stock Exchange (DSE), the DSEX, edged up 112.52 points, or 2.14 percent, from the previous day to close at 5,365.
It has gone up by 466 points in the last seven trading days.
Investors hope the momentum will prevail for a couple of more days, Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), told The Daily Star.

“The market went down a lot from where it has achieved some gains… The capital gain tax is a big issue for any market,” he said.
A total of 30.69 crore shares were traded yesterday, the highest in two and a half months, he added.
The DSES, the index representing Shariah-compliant companies, went up 29.18 points, or 2.51 percent, to 1,191.
The DS30 index for blue-chip stocks grew 30.17 points, or 1.56 percent, to 1,967.
However, at the Chittagong Stock Exchange (CSE), the CSE All-share Price Index (CASPI), the key index of the port city bourse, plunged by 291.61 points, or 2 percent, to settle at 14,876.
A top official of a leading stock brokerage firm said the market was rising as large investors were getting back their stakes, while the capital gains tax cut was an added incentive. As large investors trade good stocks, prices rise alongside the index, he said.
Shares of companies like Islami Bank Bangladesh, Square Pharmaceuticals, Renata, Beacon Pharmaceuticals, Best Holdings, BRAC Bank, Beximco Pharmaceuticals, City Bank, United Commercial Bank and IFIC Bank performed well.
Islami Bank Bangladesh accounted for the highest single-company gain of 37.65 points.
A total of 304 stocks advanced, 65 declined, and the remaining 24 did not see any price movement.
Turnover, which is a measure of the total value of shares traded on the day, increased by 48.56 percent to Tk 840 crore, the highest in two months.
The last time it was higher than this was on September 2, when it amounted to Tk 1,065 crore.
The pharmaceutical sector dominated the turnover chart, accounting for 21.33 percent of the total.
Block trades, which refers to high-volume transactions in securities that are privately negotiated and executed outside the open market, contributed 2.5 percent of the overall market turnover.
Square Pharmaceuticals Ltd emerged as the most traded share, with a turnover of Tk 33.2 crore.