The securities regulator has said that it is not logical to allow the existing board of the Dhaka Stock Exchange (DSE) to continue until holding an election for formation of a new board in line with the bourse's demutualisation scheme.

But the existing DSE board has sought to continue until holding the election, as there is no mention about an interim board in the demutualisation law.

"The securities regulator has not accepted the list of existing directors who will be on the first board of a demutualised DSE. That's why I think there is no logic to accept the existing board as the first board," said Professor Helal Uddin Nizami.

He said the DSE proposal would not come into effect unless a regulatory decision goes in favour of the premier bourse.

Meanwhile, the Bangladesh Securities and Exchange Commission (BSEC) has sought the opinion of the ministry of finance (MoF) on the first board of a demutualised DSE.

The DSE board on Wednesday decided that a proposal would be placed in the extraordinary general meeting (EGM) on October 29 to the effect that the 24 existing directors would also be there on the 'interim board' of a demutualised DSE.

Minhaz Mannan Emon, a DSE director, said as per the Section 11 (a) of the Exchanges Demutualisation Act, 2013 an election would be held within ninety days since the date of demutualisation of an exchange.

"But there is no term of interim board in the law. So, where is the problem with allowing the existing board to continue until the election?" Mr. Emon told the FE.

He said: "The DSE board has no tendency to hang on to their positions violating the rules and regulations."

"We have abided by all conditions mentioned in the law and scheme. If there is no clause on interim board, then why will not the existing board be allowed to continue until the election?" Emon said.

Mr. Emon also said so far the DSE board continued to extend its cooperation and would continue its assistance in completing the process of demutualisation successfully.

The securities regulator approved the demutualisation schemes of the two bourses in the country on September 26. As per schemes approved, each of the bourses will have a 13-member board, where independent directors will be the majority.

Read more…

The regulator has detected notable number of short-selling by the newly set-up Instant Watch Surveillance System software

The securities regulator BSEC has warned the country’s two stock exchanges of short-selling and said the rate of breaching the securities rules increased in the recent times.

Short selling is the selling of a stock that the seller doesn’t own. More specifically, a short sale is the sale of a security that isn’t owned by the seller, but that is promised to be delivered.

“The commission has asked the stock exchanges to take necessary steps to refrain from short-selling executed by its member brokers,” said Bangladesh Securities and Exchange Commission in a statement on Tuesday.

The regulator has detected notable number of short-selling by the newly set-up Instant Watch Surveillance System software.

On charge of short-selling, the commission fined Hilly Securities, a member of the Chittagong Stock Exchange, Tk100,000. The brokerage firm sold 5,000 shares of First Securities Islami Bank Ltd on May 15.

Kabir Securities, another member of CSE, was also fined Tk500,000 for violating margin loan rules.

It provided loan for purchasing Z-category or junk shares to its clients in October and for transferring fund from consolidated customers’ account to its FDR account. Credit issued against Z-category shares is a violation of margin loan rules.

The BSEC has also directed the Dhaka Stock Exchange not to allot shares to its member Don Securities Ltd after Demutualisation until settlement of allegation of swindling money of its clients.

Since August, 2010, the commission suspended trading activities of the brokerage firm in response to the complaints of its clients who brought allegation of not returning money and share for long.

Read more…

The government's revenue earnings from the Dhaka Stock Exchange (DSE) fell more than 15 per cent in the first quarter (Q1) of the fiscal year 2013-2014, compared to the same period last fiscal year as the trading volume was on the decline.

The government bagged tax worth Tk 441.08 million in the first three month (July to September) of the current fiscal year compared to Tk 519.17 million in the same period last fiscal year, registering 15.04 per cent decline, according to statistics from the DSE.

The government earned the amount on brokerage commission and share sales by sponsor-directors and placement holders.

The DSE, on behalf of the government, collects the tax as brokerage commission and sponsor and placement shares at the rate of 0.05 per cent and 5.0 per cent respectively and deposits the amount to the government exchequer.

Among the total earnings of Tk 441.08 million in the first three month of the current fiscal year, the government earned Tk 327.81 million on brokerage commission and Tk 113.26 million on share sales by sponsor-directors and placement holders.

However, month-on-month government' earrings from DSE increased by 28.48 per cent in September compared to August in 2013. In September, the government earned tax worth Tk 144.28 million against Tk 112.30 million in August.

DSE officials said the tax collection declined in first quarter (Q1) in current fiscal year due to lower transaction following the sluggish trend in stock prices.

"A bearish trend in the capital market has pulled down the government's earnings from stocks, as the trading volume is on the decline," he said.

The DSE witnessed a daily average turnover of Tk 4.87 billion in the first three months of the current fiscal year while it was Tk 5.82 billion in same period last fiscal.

"The earnings are related to turnover. It's usual that tax will fall if turnover declines," said Akter H Sannamat, managing director of Union Capital.

"The turnover marked a decline in first three months in FY 2013-14, compared to same period last fiscal year, so did tax," said Mr Sannamat.

He also said: "The tax flow will rise when the market will be back on track."

Data showed that in the last three fiscal years, the revenue earnings of the government from the stock market declined at a stress due to lower turnover value following slide in shares prices.

In fiscal year 2010-11, DSE paid tax worth Tk 4.46 billion, in FY 2011-12 DSE paid worth Tk 2.72 billion and FY 2012-13 DSE paid tax worth Tk 1.27 billion on brokerage commission and share sales by sponsor-directors and placement holders.

Read more…

A group of investors staged protests in front of the Dhaka Stock Exchange yesterday as shares fell 1.67 percent.Investors under the banner of Share Market Investors Association demanded the government bring back normalcy to the market.They chanted slogans against Ahsanul Islam Titu, president of DSE, and M Khairul Hossain, chairman of Bangladesh Securities and Exchange Commission.

Demonstrations began at 12:45pm when the prime market index lost 40 points. DSEX, the benchmark general index of the DSE, finished the day at 3,882.33 points, after falling 66.11 points.

The government declared a stimulus package in November 2011 to stabilise the market, but it has not worked properly and failed to gain investors confidence, said Mizanur Rashid Chowdhury, president of Share Market Investors Association.

Bangladesh Bank also disbursed Tk 300 crore on August 27 under its Tk 900 crore refinance scheme to help the merchant banks and stockbrokers recover the losses in small investors’ portfolio, Chowdhury said.

“It has failed to have a positive impact in the market.” The institutional investors have remained inactive in the market. Investors went for selling shares and mutual fund units to bag profits ahead of Eid-ul-Azha, said Mohammed Rahmat Pasha, managing director of BRAC-EPL, a leading stockbrokerage.

It is natural for investors to go for bulk selling ahead of Eid, Pasha added. “Fears of a further decline in line with the index’s positioning below a psychological level of 4,000 points for the sixth consecutive session acted as a catalyst behind the selling pressure and forced the market to end negatively,” IDLC Investments said in its analysis.

In the meantime, investors continued to cash out their portfolios ahead of Eid, the merchant bank official said.Turnover, the most important indicator of the market, declined 6.83 percent to Tk 247 crore from the previous day.Of the 288 issues that traded on the DSE floor, 21 advanced, 239 declined and 22 remained unchanged.

A total of 0.66 lakh trades were executed with 6.29 crore shares and mutual fund units changing hands on the Dhaka bourse.Most major sector closed in the red: foods 0.9 percent, engineering 2.9 percent, textile 2.34 percent, cement 2.11 and non life insurance 2.09 percent.

Delta Life Insurance featured in the most traded stocks chart with 51,000 shares worth Tk 31.32 crore changing hands.Progressive Life Insurance was the biggest gainer of the day, gaining 9.96 percent, while Deshbandhu Polymer was the worst loser, plunging 15.51 percent.

The Chittagong Stock Exchange also declined on the day with its selective category index, CSCX, dropping 137.26 points, to close at 7,584.45 points.

Losers beat gainers 188 to 15, with nine issues unchanged on the port city bourse that traded 60.55 lakh shares and mutual fund units with a turnover of Tk 17.81 crore.

Read more…

Bank Code

General Investor

NRB Investor

Affected Small Investor

Mutual Fund

Distribution of Refund Warrant 

 

Read more…

Private banks’ capital increased by 7.75 percent in the first half this year though their default loans marked a rise during the period due to the recent political unrest and low investments.
Their capital stood at Tk 42,592 crore as on June 30, a rise by Tk 3,065 crore from December 31 last year, according to central bank statistics.
Among 36 private banks, capital of all but three went up. The surplus capital of the banks was Tk 2,751 crore on June 30.
However, their default loans rose by more than Tk 6,000 crore during the January-June period.
Helal Ahmed Chowdhury, managing director of Pubali Bank Ltd, said though default loans increased in these banks, there was no provision shortfall against their bad loans. As a result, the banks were able to increase their capital, he added.
After 2015, the banks will have to maintain higher capital as per the Basel-III requirements, Chowdhury said.
At present, they maintain capital at 10 percent of their risk weighted asset in line with Basel-II requirements. Basel-III regime will be the latest version of risk-based capital standards set for banks worldwide.
Keeping the future requirements in mind, the banks are increasing capital every year so that they do not face pressure after 2015, the Pubali Bank chief executive said.
As the banks had to raise capital, most of them gave stock dividends instead of cash dividends in 2012, he said.
Chowdhury also blamed the rise in default loans in the private banks on political unrest, low investment in the run-up to the national elections and the central bank’s new loan provisioning rules.

However, he said, compared to the public banks, the financial base of the private banks is stronger as they are operating under strict monitoring by the central bank.
The state banks’ capital did not increase rather the amounts fell short of the requirements, according to central bank statistics.
On June 30, the capital shortfall of the state banks was Tk 9,062 crore and that of specialised banks Tk 5,650 crore.
Among the private banks, ICB Islamic Bank had the highest amount of capital shortfall — Tk 1,302 crore, followed by Bangladesh Commerce Bank’s Tk 250 crore, and Premier Bank’s Tk 183 crore.
Premier had a capital surplus of Tk 47 crore in December last year, but the other two had a deficit in the month.

Read more…

Barclays, a British bank, has recently decided to discontinue services with the exchange houses of 10 Bangladeshi commercial banks on grounds that they do not match its  new eligibility criteria.

Local bankers said the move would affect their business, particularly that of sending remittances. But the banks’ nostro accounts, used to facilitate settlement of foreign exchange and trade transactions, with Barclays will not be hampered.

“Having reviewed your business against the amended eligibility criteria, I must inform you that the corporate and investment banking divisions of Barclays will no longer be able to provide services to you,” Nick Pritchard, relationship director of Barclays, said in a letter to a local private bank.

Barclays had initially set July 10 as the date for terminating business ties with the exchange houses. The deadline was later extended by a month to give the banks time to make arrangements with alternative banks.

“The decision has put us in a difficult situation,” said Helal Ahmed Chowdhury, managing director and chief executive officer of Pubali Bank.

The corporate and investment banking divisions of Barclays have recently undertaken a review of money services it offers to business clients and accordingly, has amended its acceptance and eligibility criteria across the sector.

After reviewing the business of the exchange houses, Barclays decided in May to discontinue services to these houses, which it said do not fall under the amended eligibility criteria.

“Barclays has decided to close business with 250 exchange houses across the world, including 10 in Bangladesh,” said Nurul Amin, managing director and CEO of NCC Bank.

Amin, however, is happy that the British bank has given them one month time to get the services from other banks.

A dozen of Bangladeshi banks have opened their exchange houses in the UK in the past few years to help Bangladeshi expatriates send money home. These exchange houses are fully owned subsidiaries of the local banks, which have invested a good sum to set up infrastructure and hire people.

“We are ready to comply with more stringent policies to be set by Barclays,” said Chowdhury of Pubali Bank, adding that the closure of business ties would facilitate remittance flow through informal channels.

He said his bank is frantically trying to open accounts with other banks to continue their exchange house business.

Anis A Khan, managing director and CEO of Mutual Trust Bank, said they are trying to open an account with Habib Bank to continue their business there.

Mahfuzur Rahman, executive director and spokesperson of Bangladesh Bank, said they are aware of the Barclays decision.

“The central bank of Bangladesh has nothing to do in this regard. It doesn’t come under our jurisdiction,” Rahman said.

He, however, said the BB governor and the Bangladesh high commissioner in London are trying to persuade Barclays to change its decision.

With more than 300 years of history and expertise in banking, Barclays operates in more than 50 countries and employs 140,000 people. The bank is engaged in personal banking, credit cards, corporate and investment banking and wealth and investment management with an extensive international presence in Europe, the Americas, Africa and Asia.

Read more…

Sunlife Insurance Co Limited board meeting will be held on 27th June, 2013 at 4.00 pm to consider the financial report for the year ended 31st December 2012. The company may declare dividend for the shareholders for 2012. 

Sunlife Insurance Co Limited was listed to capital market in this year. The company had collected Tk.12.00 crore by issuing 1.20 crore general shares.

Read more…

The Securities and Exchange Commission Wednesday barred the selling of shares by sponsors and directors of RN Spinning Mills in the wake of alleged anomalies in the company's rights offer. The directive will be effective from today (Thursday) and until further order, no sponsors and directors will be able to sell their shares, according to a SEC statement.    

In the matter of rights offer the SEC had sought some documents which later were proved fake. Therefore, SEC will also file criminal cases against the company leaders. The regulator’s move comes in response to the request by the Dhaka Stock Exchange to impose restrictions on share transaction of sponsors and directors of the company.

A DSE probe panel found massive irregularities in the rights issue process of RN Spinning. A rights issue is an issue of additional share by a listed company to raise capital from existing shareholders. With the issued rights, the existing shareholders have the privilege to buy a specified number of new shares from the firm at a particular price within a specified time. A rights issue is in contrast is an initial public offering, where shares are issued to the general public through market exchanges. RN Spinning undertook a rights issue this year which was closed on March 13, but it did not credit the rights shares to the beneficiary owners' accounts, as per SEC rules, within the 21 workdays of expiry of the subscription period.

A large portion of the rights issue had remained unsubscribed, the majority of which were from sponsors and directors of RN Spinning and underwriters of the issue, who had assured of subscription but did not follow accordingly. 

In January, the SEC approved RN Spinning Mills' rights offer to issue 13.91 crore ordinary shares of Tk 20 each totalling Tk 278.28 crore. The company had offered one rights share for each existing share and took Tk 10 as a premium for each share in addition of Tk 10 face value.
The company had eventually managed to sell rights shares worth Tk 180 crore.

The SEC in June launched a probe into the delay in crediting the rights shares by the company, and the matter is now in the enforcement department of the regulator for the next course of action.

Read more…

Information Services Limited has placed to 'B' category from existing 'A' category. The company was declared 5% stock dividend for 2012.

Read more…

One Bank Limited has credited the bonus shares, declared for the year ended 2012, to the respective shareholders BO account on June 18, 2013. The company was declared 15% stock and 5% cash dividend for 2012.

Uttara Bank Limited also credited the bonus shares declared for the year ended 2012, to the respective shareholders BO account on June 20, 2013. The company was declared 10% stock and 15% cash (Tk.1.50 for each share) dividend for 2012.

On the other-hand, National Housing Finance and Investment Limited has credited the bonus shares of 2012 to the respective shareholders BO account on June 20, 2013.

Read more…

JMI Syringes & Medical Devices Ltd. has published the 1st quarter report of the company. The EPS for the 1st quarter of the company is Tk.0.08, which was Tk.0.21 for the same period of the last year.

The company also reported that the audited EPS for the year of 2012 was Tk.1.12, which was Tk.1.05 for 2011.

Read more…

The DSE will elect its new President, Senior Vice-President, and Vice-President on Saturday

The Dhaka Stock Exchange, the country's premier bourse, will elect four new Directors on Monday.

Voting started at 10am Monday and will end at 8pm, DSE Deputy General Manager Shafiqur Rahman said.

He said 240 members will elect four candidates out of eight vying for a place on the Board of Directors.

Every year, four new directors are elected to the 12-strong Board. All directors stay on the Board for three years.

After the four new directors are elected on Monday, the 12 directors will elect the DSE's new President, Senior Vice-President, and Vice-President from among them in their Saturday's annual general council elections.

Incumbent President Rakibur Rahman, directors Ahmed Iqbal Hasan, Khwaja Ghulam Rasul, and Sharif Ataur Rahman have completed their terms on the DSE's board.

Dhaka University teacher and also a University Grants Commission Member Prof MA Hashem is acting as the Chief Election Commissioner.

Read more…

 The trading category of two companies has changed.

Bangladesh Shipping Corporation has placed to 'A' category from existing 'Z' category. The company has approved 10% cash dividend for the year 2012. Last year the company were placed to 'Z' category as the company did not recommended any dividend.

On the other-hand, Kay & Kue has placed to 'Z' category from existing 'B' category as the company did not recommended any dividend for the year 2012.

Both the company will be traded under new category from 13th June 2013.

Read more…

Bangladesh Submarine Cable Company Limited will start International Internet Gateway (IIG) from 1st July 2013. The board of directors has approved it in a meeting.

Source: DSE

Read more…

BSEC has approved the Initial Public Offering (IPO) of Bangladesh Building System Limited. The company will collect Tk.140.00 million by selling 14 million general share of Tk.10.00 at face value.

Collected money will be used for repayment of Bank Loan and IPO expenses.

Based on the last financial statement of 30 June, 2012 the NAV of the company is Tk.13.07 an Earning Per Share (EPS) is Tk.2.58.

Janata Capital and Investment Limited is the Issue Manager of Bangladesh Building System Limited.

Read more…

BSEC has decided to fine Tk.5.00 (five) lac to Shymol Equity Management Ltd. for breaking the rules and regulations of securities laws. Commission in its 482th meeting has taken the decision.

The notable complains against Shymol Equity are:

1. Receive more than Tk.5.00 lac from the customers at a time.
2. Giving Margin facility to customers without having Margin Agreement.
3. Providing margin loan facility to Managing Director & Directors.
4. Depositing customers' money to MD's personal account and not showing them to company's financial statement, etc.

Read more…

The trade of ICB AMCL Sonali Bank Limited 1st Mutual Fund will commence at DSE from Wednesday, 12 June, 2012. It will trade under "A" Category. 

The trading code for the fund will be "ICBSONALI1" and Company Code for DSE is 12193.

Read more…

Stakeholders in the capital market think the proposed 2013-14 budget will be sooth market mood.

They believe the incentives proposed in the budget will help to stabilize it. The government has proposed a cluster of incentives in a bid to reduce volatility and bring back investors.

Finance Minister Abul Maal Abdul Muhith placed the Awami League-led Grand Alliance government’s last budget in Parliament on Thursday with an outlay of Tk 2.22 trillion. He proposed tax rebate on investment for individuals and on investment in private mutual funds, and withdrawal of tax on share premium.

In an instant reaction to the proposals, Dhaka Stock Exchange (DSE) President Md Rakibur Rahman said: “The government’s positive attitude towards the capital market has been reflected in the various incentives and facilities in the proposed budget.”

“We believe the budget proposals will help stabilise the market,” added the chief of the country’s prime bourse.

Chittagong Stock Exchange Al Maruf Khan also welcomed the proposals meant for the share market.“The proposed budget is positive. (It’s) especially positive for small and individual investors.”

Bangladesh Merchant Bankers Association (BMBA) President Mohammad A Hafiz also finds the budget positive for the market though not all of their demands have been accommodated.

He told bdnews24.com: “The budget has been positive for the capital market. But we had sought a lump sum allocation of Tk 50 billion in the budget. (We’re) urging (the government) again to consider it.”

In the budget speech, the finance minister said investment by firms or individuals will be allowed 15 percent tax rebate on 30 percent of income.

He also proposed an increase in the tax rebate ceiling in case of individual investors to 30 percent from existing 20 percent. In the proposed budget, the ceiling for tax rebate on investment for the individual taxpayers in certain cases has been raised to Tk 15 million from Tk 10 million.

Existing 3 percent tax at source on the premium over face value of share of a company has been withdrawn.

The tax at source of sale of bonds has also been withdrawn and 15 percent tax rebate given on the investment in private mutual funds, while the threshold for tax-exempt dividend income has been raised to Tk 10,000 from Tk 5,000.

Read more…

Md. Imamul Kabir Shanto, Chairman, Sunderban Courier Services (Pvt.)
 Ltd., Dr. Shahadat Khan, CEO, Progoti Systems Ltd and Dr. Muhammad 
Asaduzzaman, Managing Director (cc) of Bangladesh Commerce Bank 
Limited signed the agreement Saturday. Under the deal, Bangladesh
 Commerce Bank is going to launch its another financial service 
branding 'S-Cash' Mobile Banking Services.

Bangladesh Commerce Bank is going to launch its another financial service branding 'S-Cash' Mobile Banking Services under the umbrella of BCB Mobile Banking range and to this effect inked an agreement with M/s. Sunderban Courier Services (Pvt.) Limited and M/s. Progoti Systems Limited in a simple ceremony in the city Saturday.

Md. Imamul Kabir Shanto, Chairman, Sunderban Courier Services (Pvt.) Ltd., Dr. Shahadat Khan, CEO, Progoti Systems Ltd and Dr. Muhammad Asaduzzaman, Managing Director (cc) of Bangladesh Commerce Bank Limited signed the agreement on behalf of their respective organizations. M/s. Sunderban Courier Services (Pvt.) Ltd. will provide countrywide agent networks and M/s. Progoti Systems Ltd. will provide necessary technology solution & support to the bank for S-Cash mobile banking services. 

'S-Cash' Mobile Banking service is designed to deliver financial services through country wide agent networks of M/s. Sunderban Courier Services (Pvt.) Ltd. to unbanked population residing at the remotest locations of the country where the bank has no branches. The objective of this service is "Financial Inclusion" i.e. delivering financial services at an affordable cost to sections of underprivileged and low income segments of the society. Using 'S-Cash', a customer can open new 'S-Cash' Mobile account with the Bank, deposit money or withdraw cash, transfer to other customers through any authorized agent's locations of Sunderban Courier Services besides BCB branches. A customer shall also be able to send money to another customer, receive salary or pay utility bills/purchases from his account using his registered phone without visiting any bank branch or agent locations round the clock.

The ceremony was attended by Mr. Md. Yousuf Ali Hawlader, Chairman, Bangladesh Commerce Bank Limited; Mr. Shaikh Tanvir Ahmed (Rony), Managing Director, Sunderban Courier Services (Pvt.) Ltd along with Top Executives of the respective organization.

Read more…

The 14th Annual General Meeting of Trust Bank Limited was held at Army Golf Club, Dhaka Cantonment in the city Thursday. Maj Gen Ashraf Abdullah Yussuf, rcds, afwc, psc, Vice Chairman of the Bank presided over the meeting. 

The meeting approved 10 per cent stock dividend for the shareholders for the year 2012.

The Directors Report and Audited Financial Statements of the Company for the year ended on 31 December 2012 were unanimously approved. The meeting also approved the appointment of Ms. Begum Rokeya Din and Mr. Helal Uddin Ahmed as Independent Director. M/S ACNABIN, Chartered Accountant was re-appointed as external auditor upto next Annual General Meeting.

Read more…

Tanjil Chowdhury, Imran Khan

The Board of Directors of Prime Bank Limited in a recent meeting unanimously elected Mr. Tanjil Chowdhury as the Chairman and Mr. Imran Khan as the Vice Chairman of the Executive Committee of the Bank effective from 1st June, 2013.

Mr. Tanjil Chowdhury, Chairman of the Executive Committee of Prime Bank Limited is the Managing Director of East Coast Group of Companies, a diversified conglomerate with primary focus on Oil & Energy. 

Prior to assuming the Office of Chairman, he was the Vice-Chairman of the Executive Committee.

Mr. Imran Khan, Vice Chairman of the Executive Committee of Prime Bank Limited is one of the Directors of Pedrollo nk Limited, the Bangladeshi subsidiary of Pedrollo, the leading Italian brand water pumps. Mr. Khan is a promising business personality of the country. He also holds Directorship of PNL Holdings Limited, PNL Water Management Limited, PolyexPrint Ltd, Polyexlaminate Ltd, Polytape Limited, Halda Valley Tea Co. Ltd. and Hill Plantation Limited.

Read more…

The Chittagong Stock Exchange (CSE) Saturday said scrapping the opportunity of money whitening provision in the stocks will not affect the capital market.

The government proposed to scrap the provision for amnesty for undisclosed money invested in stocks in the next fiscal year though the market witnessed a lot of hypes over the issue in the last few days.

CSE President Al Maruf Khan addressing a post-budget press
 conference held at the Dhaka office of the port city bourse Saturday.

"I think scrapping the money whitening provision through investment in the stock market will not affect the market as it did not get good responses in the few years," CSE President Al Maruf Khan said at a post-budget press conference held at the Dhaka office of the port city bourse.

Mr Khan said the sluggishness in the stock business was seen over the last two years despite the presence of money whitening opportunity. "So, we believe it will not put negative impact in the stock market," Mr Khan told reporters in a query.

He praised the government for a number of proposed benefits, including tax removal on share premium and tax rebate on private sector mutual fund investments.

"The individual tax payer investors will be benefited as the government increased tax-free income from the capital market, said Mr Khan"

"Investors will also be encouraged to purchase the units of private mutual funds amid a level playing field created by the government," he said.

Though the individual tax payer investors will be benefited in line with the capital market aspect, the overall budget is as usual, he said.

The bourse, however, requested the government to increase the level of tax-free dividend income up to Tk 50,000. The government has raised the tax exempted dividend income threshold up to Tk 10,000, from existing Tk 5000.

However, he said that there is no encouraging incentive for the institutional investors. "The budget would be more suggestive and reformative to make the capital market the main source of raising capital," said Mr Khan.

Mr Khan urged the government to withdraw the proposed extra 5.0 per cent tax on listed Mobile Phone Company and Tobacco Company as the bourse think that it would decrease the power of giving divined.

About the government's high bank borrowing target in the next fiscal year, he said, it might put a negative impact on the capital market.

To meet the budget deficit, some Tk 259.93 billion (2.2 per cent of GDP) would be lent from the banking system, Finance Minister AMA Muhith said in his budget speech on Thursday.

"If the government borrows huge amount of money from the internal sources, the private sector investment will suffer, liquidity shortage would intensify and interest rate would be high which will affect the capital market,' he explained.

In addition to the incentives to the capital market, a number of reform measures are reiterated in the budget, for example financial reporting act, company act, bank company act, insurance act, tax act 1984, clearing company act etc, he said. 

"We hope that these reforms would take place within the present government tenure," he said.

In its written statement, the CSE president requested the government to reconsider some issues including re-fix tax at source for the members of the stock exchange at 0.015 per cent, down from existing 0.05 per cent, as commission for brokerage services reduced significantly.

"We hope the government will take some monetary measures like stimulus package, reduce the bank interest rate, and increase the capital market exposure limit in the next monetary policy," he said.

He also urged the government to increase the tax net, to decrease the tax burden on the exiting ones.

Mr Khan said, though there is an upward trend in the foreign direct investments (FDI), portfolio investments is not at satisfactory level. "We want a specific guideline about the portfolio investments," he said. 

The port city bourse also urged the government to involve the stock market with big projects under the public-private partnership (PPP).

He said though the government pointed out the about the Bangladesh Fund in its budget proposal, there is no specific indication about the fund implementation.

Besides, there is no specific guideline on the recently formed Bangladesh Securities and Exchange Commission's 'Capital Market Master Plan' in the budget proposal, he said.

The CSE noted that there was no specific policy about the state owned enterprises to be listed in the stock exchanges and there is no indication on derivatives market to develop the stock market in the proposed budget. "We want specific policy and guidelines about the issues," he added.

The CSE also wants a seven-year tax exemption for making the share holders' broad-base after demutualization. 

CSE Senior Vice President M K M Mohiuddin, director Md Mofizuddin and Chief Executive Officer (CEO) Syed Sajid Husain were, present among others at the press conference.

Read more…

The government has proposed a number of new benefits, including a tax rebate on investment in private mutual funds and tax deduction at source on share premium to help revamp the country's stock markets.

"The present government is firmly committed to maintain the stability of the capital market along with its continual expansion and solidification," said Finance Minister AMA Muhith on Thursday in his budget speech.

As per the proposed budget announced for the fiscal year (FY) 2013-14, a company will enjoy a tax exemption on its share premium fixed over face during the flotation of shares through the initial public offering (IPO).

Presently, a company has to pay three per cent tax on the share premium fixed by the securities regulator while offloading the shares into the stock market.

"This step will, I believe, motivate the new companies to be enlisted in the capital market," Mr Muhith said.

Proposals for Capital Market
Particulars	Existing	Proposed
Tax deductible at source on the premium over Face Value of shares	3%	NIL
Tax deductible at source on bond sale	0.05%	NIL
Tax rebate on the investment in private mutual funds	NIL	15%
Tax exempted dividend income threshold	5,000/-	10,000/-

As per another government offer, it is not required to pay tax at source on bond sales, although under the existing provision one has to pay 0.05 per cent tax on sales.

The government has offered this facility with a view to making the country's bond market more attractive and vibrant.

The more lucrative offer for the private mutual funds, which are presently in a dire state as many of their market prices have recently gone down below their net asset value (NAV), is that 15 per cent tax rebate will be applicable on the investment made in private mutual funds.

The move has been taken considering a condition made by the Asian Development Bank (ADB) which said that a level playing field should be created for the mutual funds managed by both the state-run and private organisations.

Presently, tax rebate is applicable only for the investment made in the mutual funds managed by the Investment Corporation of Bangladesh (ICB).

Moin Al Kashem, managing director of the Prime Finance Asset Management Company, said that presently the investors would be benefited by purchasing units of private mutual funds amid a level playing field created by the government.

"We hope the investors will be interested for long-term investment in mutual funds," Mr. Kashem said. 

The government has also raised the tax- exempted dividend income threshold up to Tk 10,000 from the existing ceiling fixed at Tk 5,000.

According to another proposal, investment ceiling for an individual has been raised up to 30 per cent of total income fixed at Tk 15 million.

In that case, the individual will enjoy a 15 per cent tax rebate on his income invested in stock market.

Presently, a 10 per cent tax rebate is applicable on individual income by investing 20 per cent of total income fixed at Tk 10 million.

While, speaking on tax exemption on the income of the bourses, the Finance Minister said the government has a plan to consider the bourses' proposal when the proposed demutualisation becomes effective.

Both Dhaka and Chittagong Stock Exchange sought the facility, among others, in their budget proposals submitted to the government. 

"Our government wants to build the capital market as a dynamic source of capital. This prompted us to pay due attention to the development of the capital market from the very beginning," the Finance Minister said.

Read more…