Chittagong bourse's profit falls, on rising operating cost, low revenue

The port city bourse experienced an 11.19 per cent year-on-year decline in profit to Tk 345.33 million in FY23, as revenue earnings dwindled due to low market turnover.
The finance income of the Chittagong Stock Exchange (CSE) rose significantly during the reporting period, from the year before. But higher operating costs eroded the operating profit.
Meanwhile, the company's board of directors has recommended 5 per cent cash dividend for FY23, and its annual general meeting (AGM) will be held today (Thursday) to get approval of the dividend and financial statements.
The main income of the port city bourse is normally derived from investments in FDR (fixed deposit receipts) and bonds. The company has an investment worth Tk 5.36 billion in FDR and Tk 589 million in bonds.
The finance income from these two instruments saw a 21.17 per cent year-on-year rise to Tk 342.82 million in FY23.
Despite having higher finance income, the CSE's profit fell for lower revenue income and higher operating costs.
The revenue income comes from transactions fee, listing fee, service charges and commissions. There were fewer trades in the secondary market throughout the year for the floor price imposition turning it mostly illiquid.
Secondly, the IPO inflow remained insignificant for the second year in FY23. The CSE saw listing of only seven companies and one-closed-end mutual fund in the year.
Besides, the annual listing fees of the existing listed companies slumped, as they could not expand paid-up capital due to restrictions on the issuance of bonus shares.
The CSE's total operating costs was Tk 300.98 million in FY23, while revenue income Tk 354.84 million. It reported a 54 per cent year-on-year fall in other income to Tk 86.66 million for FY23.
To enhance income, the CSE has been striving to introduce the country's maiden commodity exchange (CX). A gazette notification on the rules of the commodity has been published.
The CSE has also formulated regulations required to launch the operations of the CX upon its registration with the securities.
The CSE is likely to get the registration of the CX by this year.

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