Dhaka stocks gain on speculative buying

Dhaka stocks climbed on Monday on speculative buying on a rumour that the government might allow the opportunity for whitening undisclosed money through investment in the stock market in the forthcoming budget, market operators said.
The general index of Dhaka Stock Exchange, or DGEN, gained 81.84 points, or1.42 per cent, to close the day at 5,844.72 points. The index finished flat on Sunday.
Turnover at the bourse also increased significantly to Tk 670.82 crore, up by Tk 109.39 crore from the previous day.
A DSE stockbroker said, ‘Investors want the government to allow such incentives for the capital market as they know that it would ease the liquidity crisis in the market and also help it to rebound.’  
Market operators said conflicting rumours concerning the undisclosed money whitening facility hunted the market for about a month.
A group of investors in the last month submitted a memorandum to the Securities and Exchange Commission, the stock market regulatory body, where they demanded the facility for the capital market.
The DSE and the Chittagong Stock Exchange in their budget meetings with the finance ministry also demanded for the same.
The government, however, did not give any positive indication to their demand as the prime minister and the finance minister made negative remarks over such provision.
Akter H Sannamat, a capital market analyst, said, ‘Considering the current liquidity situation in the market the government might allow the facility but the undisclosed money should be legally earned.’
‘The rate of tax for such incentive should also be somewhere near to the rate for disclosed money; otherwise honest tax payers will be demoralised.’
Saiful Islam, managing director of BRAC EPL Stock Brokerages Ltd, said, ‘Investors seemed regaining confidence on the market following a number of moves taken by the SEC and the Bangladesh Bank.’
Saiful, however, said that to carry on the momentum the government should immediately address the liquidity crisis of the market and introduce new initial public offerings.
‘Fresh scrip is much needed to bring tempo in a depressed market, and good issues will also attract new funds,’ he said.