Govt earnings from DSE down 12pc in 11 months
Babul Barman | Monday, 6 June 2016
The government's revenue earnings from the premier bourse fell 12 per cent in the first 11 months in the current fiscal year (FY) compared to the corresponding period of last FY as turnover was on the decline.
Market insiders said the government earnings from the Dhaka Stock Exchange (DSE) fell on the back of falling turnover.
The government bagged revenue worth around Tk 1,388 million in July'15 to May period of the fiscal year 2015-2016, which was Tk 1,579 million in the corresponding period of the previous fiscal, according to statistics from the DSE.
The government earned the amount on TREC (trading right entitlement certificate) holders' commission and share sales by sponsor-directors and placement holders.
Of the total earnings of the current FY's 11 months, Tk 991 million came from the TREC holders' commission and Tk 397 million came from the share sales by sponsor-directors and placement holders, the DSE data showed.
The DSE, on behalf of the government, collects the 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.
The month-on-month, the government earnings from the DSE also fell drastically by 33 per cent in May, compared to the month of April as sponsor-directors shares sales declined significantly.
In May, government earned Tk 84 million from holders' commission and share sales by sponsor-directors and placement holders, which was Tk 125 million in 2016.
Of the total earnings in May, Tk 81.29 million came from the TREC holders' commission and only Tk 2.80 million came from share sales by sponsor-directors and placement holders.
"The government earning from the stock market fell due to due to lower transactions following the sluggish trend in stock prices," said a DSE official.
The daily average turnover on the DSE hovered between Tk 3.50 billion to Tk 4.0 billion in the current fiscal year, while it was Tk 4.22 billion in the last fiscal year.
However, DSEX, the prime index of the DSE, added 224 points or 5.33 per cent in May as it was 4,195.69 points at opening of the May and closed the month at 4,419.39 points.
"The earnings are related to turnover. It's usual that revenue earning will fall if turnover declines," said an analyst at a leading brokerage firm.
The turnover marked a decline in the 11 months of the current fiscal, compared to same period last fiscal, so did tax, he added.
DSE data showed that in the last three fiscal years, the revenue earnings of the government from the stock market declined due to slide in stock prices.
The government revenue collection from DSE was Tk 2.72 billion in the fiscal year 2011-12, Tk 1.27 billion in the fiscal year 2012-13, Tk 1.54 billion in the fiscal year 2013-14 and Tk 1.74 billion in the fiscal year 2014-15.
However, the highest revenue collection of Tk 4.47 billion was in the fiscal year 2010-11, when the stockmarket was in bullish trend.