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Revenue earnings from DSE soar 87pc month-on-month in December

Babul Barman | January 05, 2021 00:00:00

The government revenue earnings from the Dhaka bourse almost doubled in July-December period of the current fiscal year compared to the same period of the previous fiscal as trading volume was on the rise riding on regulatory measures.

Market operators attributed the rise to the growing confidence of investors.

"The government earnings from the DSE jumped as trading activities increased substantially during the period under review as earnings are related to trading volume," said a leading broker.

The government bagged revenue worth about Tk 1,451 million in the first half (H1) of the fiscal year (FY) 2020-21, which was Tk727 million in the same period of the previous fiscal, according to statistics available with the DSE.

The government earned the amount on TREC (trading right entitlement certificate) holders' commission and share sales by sponsor-directors and placement holders.

The DSE, on behalf of the government, collects 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.

Of the total earnings in July-December, 2020, Tk 1,029 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 422 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.

The government's earnings from the DSE also soared 87 per cent month-on-month in December as the government earned Tk 343 million in December which was Tk 183 million in November, 2020, the data showed.

The government earnings from the prime bourse rose significantly in December as trading activities increased substantially, said an analyst at a leading brokerage firm.

He noted that market turnover and index marked rise during the period under review amid growing confidence of investors to the market riding on regulatory measures to bring disciple in the market.

"The earnings are related to turnover. It's usual that tax will rise if turnover increased," he said.

The daily average turnover on the DSE soared to Tk6.49 billion in the just concluded calendar year, which was Tk4.80 billion in 2019.

Daily trade turnover on DSE also crossed Tk 10-billion-mark in eight trading sessions out of 21 in December, alone.

DSEX, the prime index of the DSE, also surged 1,413 points or 35 per cent in July-December, 2020 while it added 536 points in December alone.

The government's revenue earnings from the DSE hit more than 10 years low to Tk 1.04 billion in the last FY 2019-20 due to bearish market trend and suspension of trading activities for more than two months due to Covid-19 outbreak.

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, Tk 2.33 billion in FY 2017-18 and Tk 2.51 billion in FY 2018-2019 on TREC holders' commission and share sales by sponsor-directors and placement holders.

However, the DSE paid tax worth Tk 4.47 billion in the FY 2010- 11, the highest in its history, when the market witnessed a wild trend before crashing.

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