Turnover of the Dhaka Stock Exchange on Wednesday hit a two-and-a-half month high and the stocks extended gains for the third day on buying spree after the government allowed legalisation of undisclosed money by investing in the capital market, market operators said.
The Finance Bill 2011 passed on Tuesday included a provision of investment of undisclosed money in the stock market by paying a 10 per cent tax.
The benchmark general index of the DSE gained 68.18 points, or 1.14 per cent, to close at 6,038.66 points on Wednesday.
Turnover rose to Tk 937.66 crore from that of Tk 771.52 crore on Tuesday. Wednesday's figure of the turnover was the highest since April 11 when it was Tk 1,224.16 crore.
Market operators said both individual and institutional investors went for a buying binge following the government's move.
Out of the 257 issues traded on Wednesday, 205 advanced, 47 declined, and five remained unchanged.
Prices of the bank and textile shares made significant gains on the day. All but two banks gained heavily and only one textile issue went red.
The DSE general index had gained 352 points over the previous nine trading days, riding on the hope that the government might finally include a provision in the budget for fiscal 2011-2012 allowing legalisation of undisclosed money invested in the capital market.
The DGEN had shed 213 points in a week after the finance minister in his proposed budget placed in the house on June 9 allowed legalisation of undisclosed money by investing it in government treasury bonds and infrastructure development fund by paying a 10 per cent tax ignoring calls from stock market stakeholders to allow such provision in the market.
Mahmood Osman Imam, who teaches finance at Dhaka University, said, 'The government's move may boost the general investors for a short period but would not bring any substantial positive change in the capital market in the long run.'
'So, it would not be justified to say that allowing undisclosed money for capital market investment will help the market.'
On Tuesday finance minister AMA Muhith said that the facility for legalising undisclosed money did not bring much benefit in the past. 'In 2009-2010 at total of Tk
922 crore was legalised and only Tk 121 crore was realised as income tax,' he said adding that the best way to reduce the size of undisclosed money was to invest it in real economy.
Source : New Age
