Stock market analyst and chief govt officer (CEO) of AFC Capital Restricted Mahbub H Mazumdar, in an interview with Dhaka Tribune’s Niaz Mahmud, discusses the proposed nationwide finances for fiscal 12 months 2020-21 and methods during which the nation’s capital market may be strengthened. Mahbub can be an govt committee member of the Bangladesh Service provider Bankers Affiliation (BMBA).
What’s your opinion concerning the proposed finances? The proposed finances is commendable. Undisclosed cash will probably be allowed to be invested within the mainstream economic system in order that the wheel of economic system can preserve shifting. It’s to be famous that we aren’t in favor of investing undisclosed cash. Every time it turns into undisclosed cash, vital steps needs to be taken in order that the federal government can forestall siphoning off the cash. Focus needs to be given on addressing corruption strongly in order that undisclosed cash will be checked.Concerning the well being sector, Tk29,692 crore has been allotted to deal with the Covid-19 pandemic, which is essential and deserves reward. Nonetheless, there isn’t a guideline to examine irregularities of the fund’s misuse. The finances isn’t finalized but and we count on that there will probably be pointers in order that corruption and misuse of finances will be prevented.Did the proposed finances mirror your calls for for the stock market? Many issues that we anticipated weren’t proposed within the finances. Although undisclosed cash will be invested in any sector topic to 10% tax, a three-year lock-in interval situation has been imposed if undisclosed cash is invested within the capital market. It’s not anticipated and must be withdrawn. Imposing such situations won’t encourage undisclosed cash to be invested within the capital market. Because the capital market is a productive sector, we count on withdrawal of the time bar, and undisclosed cash needs to be allowed to be invested in capital topic to five% tax to advertise the capital market. What initiatives are wanted to strengthen the stock market now? As per the Finance Act 2019, if stock dividend exceeds the cash dividend, the corporate should pay 10% tax on the entire stock dividend, which isn’t good in any respect. It’s the firm and the shareholders of the corporate who will determine concerning the dividend based mostly on actuality. Nonetheless, if the federal government needs to encourage cash dividend, the federal government can provide tax incentives that will probably be helpful for all. Imposing tax on stock dividends that exceed cash dividends is tantamount to penalizing the buyers.There needs to be higher coordination among the many regulators whereas taking choices that have an effect on our capital market. There was a directive by the Finance Ministry in 2012 for coordination among the many regulators that was not complied with but.We’ve tax differentiation between listed and non-listed firms. Nonetheless, there isn’t a VAT differentiation between listed firms and non-listed firms. Listed firms are extra clear in comparison with non-listed firms and the previous pays extra VAT than the latter.Within the book-building methodology, eligible buyers have found share costs of preliminary public choices (IPOs). Nonetheless, in apply we discovered that eligible buyers failed to find the truthful price of the IPO.We’re an equity-based capital market. Time has come to have a vibrant bond market. Furthermore, we have to get ready to introduce different devices similar to choices and derivatives together with fairness and bond. We shouldn’t have the existence of a settlement firm, which we’d like urgently.Do you assume the introduced stimulus package deal will assist companies and the economic system?The finance minister proposed the financial restoration packages of Tk103,117 crore to take care of adverse financial fallout as a result of Covid-19. Nonetheless, we don’t discover any pointers on easy methods to implement the finances transparently and correct use of the fund by stopping corruption and misuse of fund allocations. It’s excessive time we have to implement our finances successfully and effectively.