Govt earnings from DSE fall 11pc in July

Sluggish trading activities affect revenue


FE Report | Published: August 03, 2018 10:28:29 | Updated: August 05, 2018 10:17:54


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The government's revenue earnings from the Dhaka bourse fell 11 per cent year-on-year in July this year on the back of falling trade volume and value.

Market insiders said the bearish market trend coupled with sluggish trading activities affected the government's revenue earnings from the prime bourse.

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The government bagged revenues of Tk 225 million in July this year which was Tk 252 million in July 2017, registering a decline of 11 per cent, according to statistics from the Dhaka Stock Exchange.

Of the total earnings in July this year, Tk 187 million came from the TREC (trading right entitlement certificate) holders' commission, popularly known as brokerage commission.

And Tk 38 million from the share sales by sponsor-directors and placement holders, the DSE data shows.

The DSE, on behalf of the government, collects the tax as TREC holders' commission at a rate of 0.05 per cent and from sponsor-directors' and placement holders' shares sales at a rate of 5.0 per cent. The DSE then deposits the amount to the public exchequer.

"Declining turnover value hit the government earnings from the DSE in the first month of the current fiscal year," said an official of the premier bourse.

"The earnings are related to turnover. It's usual that tax will fall if turnover declines," said an analyst at a leading brokerage firm.

He noted that as the turnover marked a decline in July this year compared to the same month last year, so did the tax.

The daily turnover, another important gauge, came down to Tk 8.48 billion on average in July 2018, down 10.75 per cent over the previous year's July.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), also lost about 103 points or 2.0 per cent in July this year.

The DSE paid tax worth Tk 2.72 billion in FY 2011-12, Tk 1.27 billion in FY 2012-13, Tk 1.54 billion in FY 2013-14, Tk 1.74 billion in FY 2014-15, Tk 1.58 billion in FY 2015-16 and Tk 2.46 billion in FY 2016-17 on TREC holders' commission and share sales by sponsor-directors and placement holders.

The DSE paid tax worth Tk 4.47 billion in the fiscal year 2010-11, the highest in its history, when the market witnessed a wild trend before crashing.

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