Govt revenue from DSE declines 10pc

Sluggish trading activities affected the government's revenue earnings from the Dhaka Stock Exchange (DSE) as it fell 10 per cent in the just concluded fiscal year (FY) 2015-2016 compared to the previous fiscal.
Market insiders said on the back of falling turnover, the government earnings from the premier bourse dipped accordingly, as earning is related to turnover.
The government bagged revenue worth around Tk 1.58  billion in the outgoing FY 2015-2016, which was Tk 1.75 billion in the FY 2014-2015, 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 just concluded FY, Tk 1.07 billion came from the TREC holders' commission, while Tk 508 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 government earning from the stock market fell due to lower transactions following the sluggish trend in stock prices," said a DSE official.
The total turnover at the prime bourse stood at Tk 1,072.46 billion in the outgoing fiscal year, Tk 51.06 billion lower than Tk 1,123.52 billion in the fiscal year 2014-15.
The daily average turnover on the DSE came down to Tk 4.34 billion in the just concluded FY, down by 8.05 per cent, from Tk 4.72 billion in the previous fiscal, the DSE data showed.
DSEX, the prime index of the DSE, also plunged 75.52 points or 1.65 per cent in the outgoing FY as it was 4,583.11 points at opening of the FY 2015-2016 and closed the FY at 4,507.58 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 institutional investors are yet to come out of the woods due to substantial amounts of default margin loans they are burdened with as fallout of the crisis, said an analyst.
"The participation of institutional investors remained squeezed due to default margin loans, which affected the market as well as the government's revenue earnings from the DSE," he said.
DSE data showed that in the last three fiscal years, the revenue earnings of the government from the stockmarket declined due to slide in stock prices.
The government revenue collection from the DSE was Tk 2.72 billion in the FY 2011-2012, Tk 1.27 billion in the FY 2012-13, Tk 1.54 billion in the FY 2013-14 and Tk 1.74 billion in the FY 2014-15.
However, the highest revenue collection of Tk 4.47 billion was in the fiscal year 2010-11, when the market was in bullish trend.
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