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South Asian Stock reports varied performance in the Recent Week

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A review of South Asian stock markets shows that India’s Bombay Stock Exchange (BSE) index BSE Sensex has lost 1,156 points during the week. At the end of the week, the index stood at 73,088 points. On the other hand, the Nifty-50 index of the country’s National Stock Exchange dropped by 372 points last week. At the end of the week, the index stood at 22,147 points.

Pakistan Stock Exchange Index ‘KSE 100’, gained 592 points last week. After a week of gaining, the index settled at 70,944 points.

On the other hand, The Sri Lankan stock market index hiked, and the Colombo Stock Exchange index ‘ASPI’ decreased by 280 points in a week. After a week the index settled at 11,753 points.

Bhutan’s stock market index ‘BSI’ added 13 points hence the index stood at 1,526 points throughout the whole week. Nepal’s ‘NEPSE’ lost 52 points, therefore the index stands at 1,972 points.

Hence Dhaka Stock Exchange: The benchmark index ‘DSEX’ lost by 177 points or 3.03 percent, in the outgoing week. At the end of the week, the index stands at 5,686 points.

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Takaful Insurance reveals their Dividends, Q1 Financials

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One of the Listed companies, Takaful Islami Insurance Co. Limited has recommended 10% Cash Dividend for the year ended December 31, 2023.

In terms of financial performance, The Company has also reported EPS  of Tk. 1.47 for the year ended December 31, 2023. NAV per share of Tk. 19.18.

The Annual General Meeting (AGM) of the company will be held on August 10, through the digital platform. The record date for this has been fixed at June 27.

Q1 Financials: The company’s earnings per share (EPS) was Tk 0.38 paisa in Q1 of the current financial year (January – March 24). EPS was Tk 0.37 paisa during the same period last year. As of March 31, 2024, at the end of the first quarter of the fiscal year, the company’s net asset value (NAV) per share stood at Tk 19.26.

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DSE Dips Again

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Dhaka Stock Exchange DSE, Bourse on the third working day of the week, 28th May, ended with a drop in Indices and Turnover from the previous working session. This information is known from DSE sources.

442 crore 72 lakh taka shares were traded on this day. 65 crore 39 lakh less tradings were done in DSE today compared to the previous workday, 27th May , Shares worth Tk 506 crores 12 lakh shares were traded last time, Monday

The benchmark DSEX lost 31.63 points or 5,278 The Shariah-based index DSES dropped 7.63 points or 1,152, and the blue-chip index DS30 decreased by 13.92 points or 1,886.

Of the issues traded, 92 advanced, 265 declined and 37 remained unchanged.

Global Heavy Chemicals Limited ranked top gainer on DSE, the share price increased by Tk 2.30 paisa or 9.70 percent. On this day, the share was last traded at Tk 26.00 paisa.

National Life Insurance Company Limited ranked top loser on the DSE, the share price dropped by Tk 3.20 paisa or 3 percent. On this day, the share was last traded at Tk 103.60 paisa.

DSE topped on trade is IFIC Bank PLC 21 crore 39 lakh takas of company shares have been traded.

A total of 38 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 2 crore 9 lakh 42 thousand 4 shares of the companies were traded. The financial value of which is 41 crore 34 lakh taka

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DSE’s 5 Budget Recommendations for Market Stability & Investor Benefits

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DSE's 5 Budget Recommendations for Market Stability & Investor Benefits

To ensure the stability of the capital market and benefit investors, the Dhaka Stock Exchange (DSE) has put forward five key proposals for the upcoming 2024-2025 national budget.

On Tuesday, May 28, DSE Chairman Dr. Hafiz Mohammad Hasan Babu presented these budget recommendations during a pre-budget press conference held at the Dhaka Club.

Key Proposals
Among the notable recommendations are:

Final Settlement of Withholding Tax on Dividends: The DSE suggests treating the withholding tax on dividends for individual investors as a final settlement.
Reduction in Corporate Tax for Listed Companies: To encourage more companies to get listed, the DSE proposes lowering the corporate tax rate for listed companies.
Tax Exemption on Bond Interest Income: The DSE recommends that interest income from bonds be made tax-exempt.
No New Taxes on Capital Gains from Securities Transactions: The DSE advises against imposing new taxes on capital gains from securities transactions on the stock exchange.
Proposed Corporate Tax Adjustments

In its budget proposal, the DSE advocates for reducing the tax rate for all listed companies and increasing the gap between the tax rates of listed and non-listed companies to 12.5%, up from the current 7.5%.

Encouraging Listings and Ensuring Fair Taxation
The DSE believes that the gap between the corporate tax rates of listed and non-listed companies should be increased from 7.5% to either 10% or 12.5%. This can be achieved by reducing the tax rate for publicly traded companies while increasing the rate for non-publicly traded companies. Such measures are expected to encourage more multinational and financially stable local companies to list on the exchange. The DSE strongly believes that such unprecedented steps will support the Ministry of Finance’s long-standing efforts to promote government share listings.

Despite their relatively small numbers, listed companies make significant contributions to direct income tax revenue due to their adherence to legal and regulatory frameworks. The DSE is confident that, under the effective guidance of the Bangladesh Securities and Exchange Commission (BSEC) and stringent monitoring by the stock exchange, corporate income tax revenue will continue to grow even if the tax rate for listed companies is reduced.

Reducing Securities Transaction Tax
Currently, a 0.05% tax is collected on the value of securities transactions conducted through stock exchange members, with the exchange’s income being 0.025%, or half of the collected tax. This rate is significantly higher compared to neighboring countries. Therefore, the DSE recommends reducing this tax rate to align with international best practices.

The Dhaka Stock Exchange (DSE) has proposed reducing the source tax on transaction value from 0.05% to 0.020%, a rate previously set at 0.015%.

Dividend Income Tax Adjustments
DSE recommends treating withholding tax on dividend income as a final tax liability, similar to the treatment of profits from savings certificates. Although the first fifty thousand takas of dividend income is no longer exempt under the Income Tax Act, 2023, it was previously allowed under the Sixth Schedule, Part A, Paragraph 11A of the Income Tax Ordinance, 1984.

Encouraging Small Investors
Given the current state of the capital market, DSE suggests exempting the first fifty thousand takas of dividend income from taxable income. This move is aimed at attracting small investors to the capital market, thereby increasing overall market transactions and tax revenue, which will contribute to sustainable market development.

Impact of Global Events
DSE argues that the global impacts of the COVID-19 pandemic and the Ukraine-Russia war have left Bangladesh’s capital market in a precarious situation, leading to severe liquidity issues. Addressing the proposed tax changes would boost investor confidence and help alleviate the market’s liquidity crisis. Since dividends are paid from post-tax profits, the withholding tax on dividends effectively results in double or even triple taxation for subsidiary companies. Treating dividend tax as a final tax would encourage more investment in the capital market, supporting various industrial financing efforts and enhancing overall market activity, profitability, and dividend distribution, ultimately increasing tax revenue through the capital market.

Tax Exemption on Bond Interest
DSE proposes that interest or income from any corporate bond listed on any stock exchange board, similar to zero-coupon bonds, should be exempt from tax for both issuers and investors. Alternatively, all types of bonds and asset-backed securities, including Sukuk, could be exempted from Section 106 of the Income Tax Act, 2023.

Developing a Robust Bond Market
DSE argues that the small size of the current corporate bond market creates limitations in both the capital and money markets. A vibrant bond market could benefit the economy in various ways. Tax exemptions for all types of bonds would encourage the development of a dynamic bond market, reducing reliance on bank loans for industrial financing.

Capital Gains Tax on Securities Transactions
DSE has proposed not imposing new taxes on capital gains from transactions in listed securities. Considering the overall economic development of the country, DSE requests that no new capital gains tax be imposed on securities transactions of listed companies and that the existing tax rates outlined in SRO No-196-Law/Income Tax/2015 be reduced.

These proposals aim to stimulate the capital market, attract more investors, and ensure sustainable economic growth.

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