Govt earnings from DSE rise 7.72pc in FY '19

Share sales by sponsor-directors contribute to the rise

FE Report | Published: July 04, 2019 10:44:46 | Updated: July 05, 2019 11:45:16

The government's revenue earnings from the Dhaka Stock Exchange (DSE) soared 7.72 per cent in the just concluded fiscal year (FY) over the previous fiscal.

Market analysts attributed the rise in revenue earnings to higher share sales by sponsor-directors and placement holders.

According to the DSE data, the government's revenue earnings reached Tk 2.51 billion in FY 2018-19, up from Tk 2.33 billion in the previous fiscal.

This is the highest amount in the past seven years after FY 2011-12 when the figure was Tk 2.72 billion.

Of the total earnings in the FY 2018-19, Tk 1.46 billion came from the TREC (trading right entitlement certificate) holders' commission, popularly known as brokerage commission.

And Tk 1.05 billion came from the share sales by sponsor-directors and placement holders, the DSE data show.

In the FY 2017-18, the government earned Tk 1.59 billion from the TREC holders' commission and Tk 741 million from share sales by sponsor-directors and placement holders.

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.

DSEX, the benchmark index of the premier bourse, advanced only 16 points in FY '19 amid volatile trading.

The daily turnover, another important gauge, stood at Tk 6.14 billion on an average, 5.0 per cent lower from the previous fiscal's Tk 6.46 billion.

The investors mostly followed "go-slow" strategy in the second half of the fiscal year amid liquidity crunch which diluted the turnover, said a leading broker.

"The earnings are related to turnover. It's usual that tax will fall if the turnover declines," he said, adding that despite turnover fall, revenue earnings increased riding on share sales by sponsor-directors and placement holders.

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 and Tk 2.33 billion in FY 2017-18 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 big rally.


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