The Dhaka Stock Exchange members who received their portions in the DSE’s strategic share sales proceeds have been investing their funds at the stock market that resulted in a positive vibe at the market in recent weeks, DSE officials said.
They said that 138 DSE members enjoyed a tax cut National Board of Revenue offered on condition that they (members) would invest the proceeds in the capital market for a three years’ duration.
A Chinese consortium of Shenzhen and Shanghai stock exchanges on September 4 last year bought DSE’s 25 per cent shares worth Tk 947 crore and became its strategic investor.
The 138 members received around Tk 500 crore in total from the sales proceeds.
NBR on November 4 issued a statutory regulatory order slashing the capital gains tax levied on bourse shareholders to 5 per cent from 15 per cent on condition that the shareholders who enjoy the tax cut would invest their net share-sales proceeds in the capital market for three years’ duration.
The amount they would receive must be invested in the share market within six months from the date of fund deposit in their respective bank accounts, the SRO said.
The invested amount cannot be withdrawn from the market within three years from the date of their investment in the market, it added.
Of the 250 DSE members, 225 have so far received their portions in the DSE’s strategic share sales proceeds.
Of the 225 members, 34 members could not make profits against their share sales and were not required to pay tax while 53 members did not take the NBR tax waiver and paid usual 15 per cent tax, so they are not bound to invest their sales proceeds at the market.
The 225 members paid Tk 50 crore in tax on capital gains to the government exchequer.
The government gave the tax waiver to boost the country’s capital market.
DSE director Minhaz Mannan Emon told New Age on Friday that the members had been investing their funds in the market since November last year to support the market.
’The market has gained momentum after the December 30 elections and the members’ funds added supports to the vibe,’ he said.
DSEX, the key index of DSE, soared by 700 points in last six weeks to settle at 5,950.01 points on January 24.
The sales of strategic shares came five years after the stock exchange was demutualised — to separate the ownership from management.
According to the demutualisation scheme of the stock exchange, the DSE consists of 180,37,76,500 shares worth Tk 1,803.77 crore in paid-up capital, considering the face value of Tk 10 a share of the entity.
Forty per cent of the shares of the exchange were credited to the DSE members’ accounts, while the remaining 60 per cent were kept in a blocked account. After selling 25 per cent of its shares from the blocked account to the strategic investor, the bourse would float the remaining 35 per cent through an initial public offering.