No gifts for stocks in new budget

Bangladesh's capital market, which is still struggling to regain investor confidence after the crash of 2010, did not get any incentive from Finance Minister AMA Muhith in the proposed budget for fiscal 2017-18.

In the lead-up to the budget announcement yesterday, the stockmarket leaders demanded continuation of tax exemption for five years as the stockmarket was going through the demutualisation process. But, it did not get any attention in the proposed budget.

In the budget speech, Muhith mentioned the measures that have already been taken but did not propose any new incentive for the bourses. 

As a result, the announcement of the largest ever budget in the country's history had no noticeable impact on the market indices yesterday.

DSEX, the key index of the Dhaka Stock Exchange, saw a moderate rise of 35.6 points to close the day at 5,438.7 points. Blue-chip index DS30 witnessed a gain of 17.6 points to end at 2,022.7 points.

It is unfortunate that the stockmarket did not get any incentive in the budget, said Ahsanul Islam Titu, former president of the DSE.

“But we send our appreciation to the government for not including the stock exchange services in the new VAT net,” he added.

In order to meet the capital needs of start-ups and new companies in the capital market, Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015 has been formulated, Muhith said in his budget speech.  A modern surveillance system has already been installed to bring transparency in transactions.

An initiative has been taken to establish a small-cap platform to facilitate capital formation of small and medium enterprises, according to his speech. 

A plan has been taken to establish a separate clearing and settlement company as part of a long-term action plan for the development of the capital market.

The necessary rules have already been formulated for the purpose.

Besides, initiatives to find strategic partners under the demutualisation law to enhance technical and professional capacities of the stock exchanges will continue, the minister said.