DHAKA: After the great collapse in 2010, the share market has been showing positive transaction from December last year to March of current year. This turn around will help the affected investors get back their lost capital.
However, this positive sign of change did not last long as the price started going downward from last April centering various issues which are still continuing. For this downfall, Tk 2 thousand crore daily transactions have come down to Tk 300 crore quotas only.
Considering the sliding situation of share market, 29 lakh investors, brokerage house, merchant banks and other financial institutions, the government in the upcoming budget of 2017-18 is going to reduce the interest rate of savings certificates along with imposing excise tax on deposits. The market analysts expect that the share market will be invigorated after the budget of new fiscal year.
The banking sector people are saying that the present rate of interest on bank deposit is only 4-5 percent and if the excise duty is made double then the common depositors will not keep their money in the banks. The depositors of savings certificates will invest in the share market with the expectation of making profit.
Rakibur Rahman, director of Dhaka Stock Exchange (DSE) told Banglanews that the present situation in the banks is so much weary that it is better and profitable to deposit in the capital market. Besides, it is learnt that the rate of savings certificates is going to be reduced and if so then the capital market will get refreshed.
According to the decision of the government from next July if excise duty is imposed on fixed deposits then there will be no profit rather this will incur loss.
According to the decision, the rate of excise duty will be Tk 1000 on the deposits from Tk one lakh to Taka 10 lakh. If any body keep Tk one lakh in nationalized banks for three month duration then after the expiry of the period the owners will get Tk 1125 at the interest rate of Taka 4.50 percent.
However the rate in private banks is one percent more. Source tax at the rate of 15% will be deducted amounting to Taka 169.00. The excise duty will be deducted Taka one thousand. So in all the deduction will be Taka 1169. This will be ultimately become grand profit of Taka 99,956.00 in exchange of depositing of Taka one lakh.
It means the customer will get less money by purchasing three month duration savings certificates. The purchase power of the people in view of decision will be less due to inflation of money. So the people will invest in the capital market. If investments increased then the price of share will jump and the stock market will get refreshed.
On the other hand the rate of corporate tax will be reduced along with the opportunity of investing the black money conditionally, it is learnt.
Analyzing over all situation economist and capital market specialist Abu Ahmed told Banglanews that if the budget is created in a capital market friendly manner then the share market will improve from this weary condition. He further told that now there is lot of money to people but they cannot invest the money due to lack of investment environment.
BDST: 1435 HRS, MAY 31, 2017
SJN/AP/SMS
