The government earned more than twice the amount of revenue from the Dhaka Stock Exchange with a rise in share trading despite the corona pandemic, marking a 130.19 percent rise in 2021 against the previous year.
The earnings from the DSE jumped to Tk425.86 crore in the last year compared to the previous year amounting Tk 185 crore, according to DSE sources.
Experts said the revenue earnings from the DSE witnessed rapid growth as trading volume was on the rise riding on regulatory measures.
Although the capital market was volatile in the last two to three months of last year, in the first nine to 10 months of 2021, the uptrend of the index has led to transactions in the capital market, they mentioned.
As a result, investors who have been inactive for years are actively trading in the capital market, they
said, adding that with an increase in their transactions, the government has received more than double the revenue from this sector.
With more transactions and more revenue, the government should use the right policy to keep the capital market stable, they further said.
According to the Income Tax Ordinance, the government gets revenue income from buying and selling two types of shares. The first type is the revenue income from buying and selling shares of the company's entrepreneurs-directors. The second type is the tax levied on brokerage houses by investors in buying and selling shares.
According to the DSE data, in 2021, a total of Tk 3,54,052.86 crore has been transacted for buying and selling shares of entrepreneurs-directors and general investors.
From this transaction, the revenue of the government has been Tk425.86 crore from the sale of shares of entrepreneurs and directors and the commission imposed on the brokerage house.
In 2020, the transaction for buying and selling shares was only Tk 1,34,891.22 crore.
Eminent economist and market expert Prof Abu Ahmed told the Bangladesh Post, “Some market supportive initiatives by the BSEC have been rebuilt confidence among investors to inject funds more in the market.”
As a result, the government revenue earnings rose as trading volume was on the rise riding, he added.
The capital market now draws the attention of investors as a big sector, it is the great success of the capital market, he mentioned.
“The government should immediately prepare the ground quite well to bring in some good companies in 2022, in order to undertake a drive to develop a long-term financing capital market,” Ahmed mentioned.
He suggested investing in companies that are continuing to make good profits over the last few years with business-successful organizations, and efficient management authorities, when considering investing in the capital market.
Ahmed mentioned that the government should make some rules and give incentives including reducing corporate tax for listed companies to encourage good companies to be listed in the stock market.
Shakil Rizvi, Director and former President of DSE, said, “The capital market has passed fairly well. As a result, transactions have increased, revenue has also increased due to increase in transactions.”
If the capital market is stable, automatic transactions will increase, he said, adding that if more shares are bought and sold here (DSE), the government will get more revenue. Hence, the government should pay more attention to this sector, he mentioned.
Mohammad Rezaul Karim, Executive Director and spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), said, “The capital market is now stable. The liquidity crisis has begun to subside. Special funds are being created to support the market. So that the market can provide support by buying shares.”
However, the DSE Broad Index (DSEX), the main price index of the Dhaka Stock Exchange, rose by 1354.59 points or 25.08 percent, to 6,756.66 points in 2021.
In 2021, the DSEX rose to a high of 7368 points and a low of 5044.99 points. The journey of this index started on January 28 in 2013 with 4,090.47 points.
The DSE30 Index, comprising blue chips, increased 568 points or 28.95 percent to close at 2532.58 in 2021 and the DSE Shariah Index (DSES) went up 189 points or 15.22 percent to close at 1,431.
Market capitalization of the DSE went up by 20.96 percent or Tk 93.966 crore to Tk 5,42,000 crore in 2021.
Before lockdown imposed by the government, this fund declined by 6.28 percent or Tk 29749.91 crore to Tk 443345.80 crore on April 4 from Tk 473095.70 on March 4.
In 2021, the market capitalization reached a new high of Tk 5,86,000 crore and the minimum was Tk 4,43,000 crore.
A total of 15 companies have offloaded primary shares worth Tk 16.58 billion in the just-concluded year 2021, the highest amount in more than a decade, amid virus-induced sluggish economic activities.
In 2020, it was only eight companies to be listed in the DSE and these companies have offloaded primary shares worth Tk 9.85 billion.