Weekly analysis: Daily average turnover drops 10pc on prime bourse
Stocks posted marginal fall last week that ended Thursday as investors followed cautious stance amid ongoing earnings and dividend declarations. In a major development, the prime bourse delisted ‘Z’ category companies– Rahima Food and Modern Dyeing — from the main board as they were not in operation for more than three years. The week featured five trading sessions as usual. Of them, three sessions edged higher while two ended lower. Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 21.48 points or 0.40 per cent to settle at 5,337. The DS30 index, comprising blue chips, also fell 2.31 points to finish at 1,904 points. However, the DSE Shariah index advanced 5.70 points to end at 1,273. Turnover, another indicator of the market, also declined as total turnover on the DSE amounted to Tk 43.91 billion which was Tk 48.50 billion in the week before. The daily turnover averaged Tk 8.78 billion, which was 10 per cent lower than the previous week’s average of Tk 9.70 billion. The market capitalisation of the DSE inched up by 0.04 per cent as it was Tk 3,868 billion on opening day of the week while it rose to Tk 3,870 billion on Thursday.
Weekly analysis: Major sectors witness mixed trend
The major sectors saw mixed trend last week that ended Thursday as investors were active both sides of trading fence amid ongoing earnings and dividend declaration. Of the 19 sectors listed with the prime bourse, the market-cap of 11 sectors saw downturn while eight ended higher. Among the major sectors, banking posted the highest negative return of 2.80 per cent as prices of 28 banks ended lower, out of 30. Ten banks lost more than 5.0 per cent during the week. Among the bank issues, Mercantile Bank was the biggest loser, losing 8.50 per cent, followed by Shahjalal Islami Bank with 6.90 per cent, Jamuna Bank 6.80 per cent, Premier Bank 6.50 per cent, ICB Islami Bank 6.0 per cent, IFIC Bank 5.80 per cent. The cement sector fell 3.10 per cent as prices of five issues of the sector closed lower, out of seven. The non-bank financial institutions also lost 1.75 per cent as 18 issues of the sector ended lower, out of 23. Paper & printing sector also plunged 8.26 per cent as prices of newly listed Bashundhara Paper Mills fell sharply by 9.0 per cent to close at Tk 139.10 each. Insurance, mutual fund, ceramic, services & real estate, travel & leisure, food & allied and power sectors also lost 2.28 per cent, 2.21 per cent, 1.61 per cent, 1.39 per cent, 1.01 per cent, 0.86 per cent and 0.01 per cent respectively. On the other hand, IT sector posted the highest gain of 12.45 per cent, followed by tannery with 5.10 per cent, engineering 3.62 per cent, telecommunication 3.25 per cent, miscellaneous 2.35 per cent, textile 1.48 per cent, jute 0.76 per cent and pharmaceuticals 0.68 per cent. The heavyweight telecommunication sector, which comprised two issues – Grameenphone (GP) and Bangladesh Submarine Cable Company (BSCCL), also saw 3.25 per cent rise as prices of largest market cap GP’s share price rose 3.0 per cent to close at 401.80 on Thursday, the last trading day of the week following its interim dividend declaration.
Bangladesh Krishi Bank seeks Tk 20.46b interest subsidy
The Bangladesh Krishi Bank (BKB) has sought Tk 20.46 billion as interest subsidy from the government to meet its capital shortfall. According to a Bangladesh Bank (BB) guideline, the BKB gives loans to crops, fisheries and livestock sectors at a maximum of 9.0 per cent interest rate. For this, the BKB has been making loss per annum. Currently, it has accumulated a deficit of funds. According to the BB, the BKB has the highest capital shortfall at Tk 79.30 billion as of last March. The state-run financial institution fails to meet the minimum capital requirement due to the widening defaulted loans. It sought Tk 20.46 billion as interest subsidy between fiscal years (FYs) 2013-14 and 2016-17 to meet its capital shortages, according to the BKB data. The government provided over Tk 7.97 billion as subsidy against BKB’s demand for Tk 20.44 billion between FYs 2003-04 and 2012-13. The government released Tk 4.0 billion for the BKB as part of recapitalisation for FY 2017-18. Until May, the BKB had the highest 81,211 agri loan cases pending among all the state banks, involving over Tk 2.68 billion. Some 376 cases involving over Tk 14.58 million were settled in the same month. The bank could not trace 4,558 borrowers after issuance of warrants involving Tk 139.10 million loans. The disbursement of farm loans by the BKB has reached 84.57 per cent of its full-year target in the first 10 months of last fiscal year. The total target was fixed for the bank at Tk 49 billion for FY ’18, according to the data available at the central bank.
Govt’s tax receipt from DSE dips in FY18
The government’s tax collection from the Dhaka Stock Exchange dropped by 16 per cent or Tk 45 crore in last fiscal year (2017-18) compared with that in the previous fiscal year (2016-17) as the market was mostly sluggish in the second half of FY18. The National Board of Revenue in FY18 received Tk 237 crore from the DSE against its receipt of Tk 282 crore in FY17. As per the Income Tax Ordinance 1984, the DSE collects 0.05 per cent tax on turnover and 5 per cent tax on capital gains from share sales by sponsor-directors and placement holders. In FY18 the revenue board received Tk 159.03 crore as tax on turnover against Tk 180.29 crore in the previous fiscal year. The tax on sponsor-directors’ capital gains, however, hit a five-year high in FY18 to Tk 74.12 crore from that of Tk 66.23 crore in FY17. The total turnover at the bourse dropped by 11.88 per cent to Tk 1,59,085.2 crore in FY18 from Tk 1,80,522.2 crore in FY17. The daily average turnover declined to Tk 646.6 crore in FY18 (246 trading days) compared with that of Tk 755.3 crore in FY17 (239 trading days).
Bangladesh Bank tightens pvt airlines’ spending in int’l routes
Local private airlines operating on the international routes must take Bangladesh Bank permission for remitting any fund from Bangladesh for expenses in foreign ports, if they face deficit after spending from their receipts at the ports. The BB issued a circular in this regard on Wednesday stating that the private airlines would have to apply to the foreign exchange operation department of the central bank for remittance of money for making up the deficit while making bonafide transactions in foreign ports. The BB said the airline operators would be allowed to meet their foreign expenses only from the receipts at foreign ports but they would be allowed to remit fund with BB permission in case of any deficit. The operators were also asked to repatriate fund from abroad on a regular basis if the entities have any excess earnings after meeting expenses.
NBR moves to bring more people under tax net
In an effort to expand country’s narrow tax base, the National Board of Revenue (NBR) has moved to gather ‘secondary data’ of potential new taxpayers. In a country of over 160 million (16 crore) population currently there are only 3.5 million (35 lakh) e-TIN holders. Secondary data refers to the information of the individuals that are already kept in any organisations. The NBR also for the first time has started to collect information of the potential taxpayers at the upazila level through secondary data gathering, otherwise known as internal survey. According to the NBR sources, the NBR officials generally collect information of the potential taxpayers by door to door survey. By this the revenue collecting authority finds out new taxpayers. Besides, he mentioned that the NBR is taking information of foreigners from Bangladesh Investment Development Authority (BIDA), vehicles owners from the BRTA, land buying and selling information from the sub-registry offices, power distribution offices and service oriented offices. Information of the flat and house owners are also being taken from the National Housing Authority. All these efforts would help NBR identify the eligible taxpayers who are still staying out of tax net.
10-year average export growth stands at 10.48pc
Country’s average annual growth in merchandise export stood at 10.48 per cent during the last 10 years. The figure is estimated on the basis of export data, furnished by the Export Promotion Bureau (EPB). It also showed that in the last 10 years, between FY09 and FY18, most of the time annual export registered single-digit growth. The highest annual growth was registered in FY11 when country’s merchandise export jumped by 41.39 per cent and stood at $22.92 billion. Three more fiscal years also experienced double-digit growth in annual export. These are: 10.28 per cent in FY09, 11.29 per cent in FY13 and 11.66 per cent in FY14. Export earnings showed single-digit growth in the past four years at a stretch. The lowest annual export growth, only 1.20 per cent, was recorded in FY17.
LNG import to increase energy subsidy by 230pc
The subsidies are expected to make a quantum leap this fiscal year, driven by the imports of liquefied natural gas (LNG). This is a new head for subsidies as Bangladesh is importing this alternative fuel to combat gas crisis, especially in the Chattogram region. The maiden floating storage and re-gasification unit or FSRU carried 133,000 cubic metres of LNG from Qatar in April. Its commissioning has not started yet, though all necessary preparations had been made by Chattogram-based gas distributing company. In the meantime, the government has devised a plan to raise its subsidy outlay by 232 per cent to Tk 196 billion for non-financial institutions, including the Petrobangla. The Bangladesh Petroleum Corporation (BPC), the sole importer of petroleum products, will also be involved in importing LNG. LNG demand is seasonal and typically peaks during winter season in colder northern Asian markets.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$70.46||↑1.63||↑2.37%|
|Crude Oil (Brent)||$73.07||↑1.33||↑1.85%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 84.00|
|GBP 1||BDT 110.34|
|EUR 1||BDT 98.48|
|INR 1||BDT 1.22|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.