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The government's revenue earnings from the Dhaka Stock Exchange (DSE) dropped 15 per cent month-on-month in November as share sales by sponsor-directors and placement holders fell drastically.
Market analysts said low share sales by sponsor-directors coupled with sluggish trading activities affected the government's earnings from the Dhaka bourse in November.
The government bagged revenue worth Tk 183 million in November this year which was Tk 216 million a month ago, according to available data with the DSE.
Of the total earnings in November, Tk 174 million came from the TREC holders' commission, popularly known as brokerage commission, while only Tk 9.0 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
In October this year, shares sale by sponsor-directors and placement holders was Tk 46 million.
The government earned the amount on TREC (trading right entitlement certificate) holders' commission and share sales by sponsor-directors and placement holders.
The DSE, on behalf of the government, collects tax as TREC holders' commission and share sales by sponsor-directors and placement holders at the rate of 0.05 per cent and 5.0 per cent respectively and deposits the amount to the government exchequer.
A DSE official said mainly lower shares sale by sponsor-directors hit the government's earnings from the Dhaka bourse in November.
He noted that the earnings are related to turnover and sponsor-directors share sales. It's usual that tax will fall if the turnover and sponsor-directors' share sales declined.
The daily average turnover stood at Tk 7.90 billion in November, which was 7.05 per cent lower than the previous month's average of Tk 8.50 billion.
DSEX, the prime index of the DSE, also eroded 30 points to stand at 4,866 points on November 30, 2020.
He, however, said overall revenue earnings from the main bourse remained high in five months of the current fiscal year riding on regulatory moves to restore discipline in the country's capital market.
The government earnings from the DSE jumped 74 per cent in July-November period of the FY 2020-21 compared to the previous fiscal year, the bourse data showed.
The government bagged revenue worth Tk 1,108 million in July- November period for the FY 2020-21, which was Tk 636 million in the same period of the previous fiscal, according to DSE data.
The government's revenue earnings from the DSE hit more than 10 years low to Tk 1.04 billion in the last FY 2019-20 due to bearish market trend and suspension of trading activities for more than two months due to Covid-19 outbreak.
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, Tk 2.46 billion in FY 2016-17, Tk 2.33 billion in FY 2017-18 and Tk 2.51 billion in FY 2018-2019 on TREC holders' commission and share sales by sponsor-directors and placement holders.
However, the DSE paid tax worth Tk 4.47 billion in the FY 2010- 11, the highest in its history, when the market witnessed a wild trend before crashing.