Appreciating the proposed budget for fiscal 2020-21, Dhaka Stock Exchange (DSE) on Friday said it is a cutting-edge, unprecedented and pro-people fiscal plan for the general investors in the capital market, reports BSS.
“The budget is well-planned with development and business-friendly strategy to build a sustainable and prosperous Bangladesh overcoming this unwanted situation rendered by deadly COVID-19,” said the country’s prime bourse in its post-budget reaction.
Finance minister A H M Mustafa Kamal on Thursday announced a Taka 5,68,000 crore national budget for fiscal year (FY21) at the Jatiya Sangsad, aiming to attain a 8.2 percent GDP growth rate through continuing the momentum of the economy with the required economic activities after tackling the impacts of COVID-19 pandemic.
DSE said the finance minister has formulated the budget comprising the achievements of government and requirement of upcoming challenges due to coronavirus to steer the country’s economy ahead.
“The budget has been synchronized with long-standing expectations and attainment of investors,” it added.
In the budget, the government has taken six short and long-term measures to rejuvenate the stock market and bring dynamism into the sector.
These include- enhancing participation of banks and non-bank financial institutions in the capital market, ensuring easy credit facility for merchant bankers and institutional investors, boosting investment capacity of state-owned Investment Corporation of Bangladesh, taking steps to bring confidence in the stock market, taking steps to increase institutional investment and listing multinational companies and state-owned enterprises to enhance quality of IPOs in the stock market.
In his budget speech, the finance minister said it is noteworthy that four state-owned banks, namely Sonali, Janata, Agrani and Rupali, have already decided to increase their investment in the capital market.
“Further, to maintain liquidity in the capital market by increasing investment from private banks, Bangladesh Bank now allows scheduled banks to invest Taka 200 crore in the stock market taking financial support from the central bank,” he added.
Kamal said banks will be allowed to show the fund as special investment, which will not fall within the purview of the banks’ stock market exposure of up to 25 per cent of their capital.
He revealed some tax incentives have been offered in the current fiscal year to encourage the capital market.
For example, dividend income from the listed companies was made tax-free up to Taka 50,000, and double taxation on dividend from listed companies was removed. Declaration of cash dividend for at least 50 percent of the profit of listed companies has been made mandatory.