DSE fails to achieve targeted profit growth

September 28, 2014

The bourse makes Tk 135cr net profit
The demutualised Dhaka Stock Exchange fell short of its target of achieving 28.50 per cent profit growth as the profit of the bourse grew by 16.87 per cent in the financial year 2013-14 compared with that in the FY 2012-13. The bourse in FY14 made net profit of Tk 135 crore while its profit was Tk 115.51 crore in the previous year. The earning per share of the DSE stood at around Tk 0.75 considering its 180,37,76,500 shares.
According to the business plan of the bourse approved by the Bangladesh Securities and Exchange Commission, the compound annual growth rate of total revenue has been forecasted to grow by 24.3 per cent for the next seven years, while the net profit is expected to grow by an average of 28.50 per cent.
Earning per share will grow from Tk 0.08 in the FY13 to Tk 3.55 in the FY20, the business plan said.
Asked, DSE managing director Shwapan Kumar Bala told New Age, ‘The bourse is trying its best to maximise its profit by minimising expenses.’
He also said that they had already taken several steps to open new arenas to increase the bourse’s profitability.
Another DSE senior official told New Age that a fall in bank deposit rate was one of the reasons for failure in achieving the desired profit growth.
As per the bourse’s demutualisation scheme, the DSE has fixed deposit in banks worth Tk 862.72 crore.
The DSE official also said that subsidy for members’ insurance and brokerage houses was among other expenses.
A DSE board member told New Age that the shareholders of the bourse might get 5 per cent dividend for the FY 2013-2014 considering its future requirement for capital for expansion plan and investment.
Dividend payout ratio of the DSE will be fixed every year by the board of directors considering future funding requirement of capital expansion plan and investment requirement, the DSE’s business plan also said.
A former DSE director told New Age that the bourse should offer at least 10 per cent dividend to its shareholders.
He also said that the members-turned-shareholders of the bourse had expressed their expectation to get at least 10 per cent dividend in the last year’s annual general meeting.
The DSE turned into a profit-oriented company from non-profit entity after its demutualisation, separating their management from ownership.
As per the demutualisation scheme, all of its 250 member-brokers got 72.10 lakh shares each of the demutualised stock exchange of Tk 10 face value of each share.
The paid-up capital of the Dhaka bourse was set Tk 1,803 crore.

-With New Age input

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