Prime bourse's net profit drops 16 per cent

The board of directors of Dhaka Stock Exchange (DSE) has recommended 5.0 per cent cash dividend for the fiscal year (FY) 2017-18, although its net profit fell nearly 16 per cent year-on-year.

The premier bourse's net profit came down to Tk 1.04 billion in FY 2018, lowest in the past five years after the demutualisation in 2013.

A DSE director said the net profit fell by nearly 16 per cent in FY 2018 compared to the previous fiscal due mainly to a prolonged bearish trend at the market coupled with falling trading activities.

Recently, the board of directors of the country's premier bourse at a meeting recommended 5.0 per cent dividend for its shareholders, the director said.

The final approval of dividend by DSE shareholders will come during the bourse's annual general meeting (AGM) scheduled to be held on January 26, 2019.

According to DSE, profit of DSE declined to Tk 1.04 billion in FY2018 which was Tk 1.23 billion in FY2017.

Considering 1,803,776,500 shares of the prime bourse, its earnings per share (EPS) also declined to Tk 0.58 in FY18 from Tk 0.69 in FY17.

The bourse's net profit declined as its operational profit dipped significantly due to a prolonged bearish trend at the market and low participation of investors in the market, said DSE director Rakibur Rahman.

He noted that a large part of the DSE profit came from the interests generated from the bourse's fixed deposits with banks.

The bourse has fixed deposits worth around Tk 10 billion.

The daily average turnover at the prime bourse was Tk 6.46 billion in the FY2018, while the figure was Tk 7.55 billion in the fiscal year 2017.

DSEX, the core index of the DSE, also lost 250.59 points, or 4.43 per cent, to 5,405.46 points in FY18.

Another DSE director said that the bourse recommended 5.0 per cent cash dividend for its shareholders in FY 2018 as the bourse would require huge amount of money to implement its business plans ahead.

The bourse made net profit of Tk 1.19 billion in the FY 2016, Tk 1.34 billion in FY 2015 and Tk 1.35 billion in FY 2014, the DSE data shows.

The DSE has become a profit-oriented company owned by shareholders after demutualisation in 2013.

The demutualisation scheme was approved by Bangladesh Securities and Exchange Commission in 2013, and the law on the issue was passed in 2012, to bring transparency to the stock market.

Demutualisation is a way to separate the bourses' management from ownership. Prior to demutualisation, Bangladesh's stock exchanges were non-profit organisation, owned by the exchange members, who were usually stock brokers.

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