The Financial Express

Budget frustrates CSE as it loses sight of market

| Updated: June 12, 2018 10:54:03

Budget frustrates CSE as it loses sight of market

The Chittagong Stock Exchange (CSE) on Sunday expressed frustration as the budget proposed for fiscal year 2018-19 did not focus on the country's capital market as per their expectations.

It urged the government to include the stock market in the budgetary policy.

"We had made a set of budget proposals. But our expectations were not reflected in the proposed budget, despite ongoing unrest in the capital market," CSE Managing Director M. Shaifur Rahman Mazumdar told a press conference at the bourse's Dhaka office.

The CSE recommended the government to deliver necessary instructions to utilise the reforms of the capital market for the sake of the country's economy.

"We are frustrated a little bit as there is no strategy in the budget to utilise the capital market," Mr. Shaifur said.

The port city bourse put forward a set of proposals for considering in the budget, including the need for giving specific significance and instruction for listing the state-owned enterprises (SoEs) with the stock exchanges.

It also laid emphasis on the need for bringing necessary reforms in the existing laws to bring multinational companies (MNCs) in the capital market and to introduce advanced products.

The CSE also recommended for mandatory listing of the companies while approving their foreign debts and syndication financing.

"A strong national coordination committee should be formed for the development of the capital market," said the CSE managing director.

The CSE also sought the corporate tax cut by 2.5 per cent for all the listed companies.

The budget proposed to cut the corporate tax rates by 2.50 per cent only for the banks, insurance companies and financial institutions.

"The gap between corporate tax rates for the listed and non-listed companies should be widened gradually." The gap should be 15 per cent, it said.

The CSE has sought the strategy of legal obligation, regulatory coordination and financial scheme to list the profitable corporate entities with the stock exchanges.

It also urged the government to strengthen the state-run Investment Corporation of Bangladesh (ICB) financially, and to relax its single borrower exposure limit for the loans disbursed by other banks.

"The ICB's role, other than the capital market, should be kept limited," said Mr. Shaifur.

The port city bourse also sought 100 per cent tax waiver for next three years to facilitate the exchanges' efforts to include strategic partners as part of the demutualisation process.

It said the capital market is influenced by the unrest in banks and financial institutions as their market capitalisation is more than 50 per cent of the total market.

"Proper strategy should be adopted to reduce the unrest in banks and financial institutions," the CSE said.

Sayadur Rahman, a shareholder director at CSE, and Md. Ghulam Faruque, deputy general manager, among others, were present at the press conference.

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