Sluggish turnover hits govt earning from DSE

The government's revenue earnings from the Dhaka bourse slumped 25 per cent year-on-year in first quarter (Q1) of the fiscal year (FY) 2019-20 as trading volume was on the decline.

Market analysts said sluggish trading activities coupled with low share sales by sponsor-directors affected the government's earnings from the Dhaka Stock Exchange in July-September quarter.

The government bagged revenue worth about Tk 435 million in July-September period of the current fiscal year which was Tk 582 million in the same quarter in the previous fiscal, according to data 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.

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 Q1 of the current fiscal year, Tk 249 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 186 million came from the share sales by sponsor-directors and placement holders, the DSE data showed.

However, month-on-month, the government earnings from the prime bourse soared 89 per cent in September as the total revenue collection stood at Tk 157 million in September which was only Tk 83 million in August, 2019, the DSE data showed.

Falling turnover value hit the government earnings from the prime bourse in July-September quarter of the current fiscal year, said a leading broker.

He noted that the earnings are related to turnover. It's usual that tax will fall if the turnover declines.

The daily average turnover for the July-September period of the current fiscal year came down to Tk 4.30 billion, which was Tk 7.40 billion in the same quarter in the previous fiscal.

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