Stock market cap hits record high
The stock market has risen to new heights with market capitalisation hitting a high point last week while overvalued shares still remaining a concern. Market capitalisation at Dhaka Stock Exchange (DSE) reached a record high of Tk 509,937 crore on Thursday. Similarly, the DSE’s daily average turnover rose by around 19 per cent to Tk 2,438 crore for the week, which is the second highest since peaking in 2010, as per market data.The big news is that people are coming out to invest now, but they need to invest in fundamental stocks, they said. Among all sectors, textiles rose the highest by 10.2 per cent last week.Cotton was being traded at an average of $0.60 per kilogramme during the June-December period in 2020 while it later ranged between $0.95 and $1.7 in March this year, according to data from Bangladesh Textiles Mills Association.Investor participation is currently very high so turnover, an important indicator of the market, is hovering at the Tk 2,500 crore level.The DSEX, the DSE’s benchmark index, rose to 6,066.64 points at the end of last week. The index crossed and has been hovering at the 6,000 level since 2017, showed the DSE data.
G7 leaders will endorse 15pc global minimum corporate tax
G7 leaders meeting in Britain will endorse US President Joe Biden’s proposal for global minimum tax of at least 15 per cent on corporations, White House national security adviser Jake Sullivan said on Twitter on Friday. The US Treasury in May proposed a global minimum corporate tax of at least 15 per cent to try to end a downward spiral of corporate tax rates.By supporting the move, major economies are aiming to discourage multinationals from shifting profits – and tax revenues – to low-tax countries regardless of where their sales are made. Current global tax rules date back to the 1920s and struggle with multinational tech giants that sell services remotely and attribute much of their profits to intellectual property held in low-tax jurisdictions.The decision had been expected after G7 finance officials backed a tax rate of at least 15 per cent during a meeting on June 5. The US Treasury has said the G7’s endorsement will provide momentum for advancing negotiations towards a broader G20 finance meeting in July in Italy.
Digital transactions – the new normal
The Covid-19 pandemic has turned out to be a global issue of shared human vulnerability. Except for a few islands in the south Pacific, no country has been spared from the invisible virus. The woes continue to batter the economy and threaten sustainability. While scientists have succeeded in developing a vaccine, governments in most countries are still battling this biological turbulence by enforcing lockdowns, social distancing, closure of educational institutions, tourism and travel. They are in a dilemma in chalking out a balance between economy and health.Although the Covid-19 is a health crisis, it has a direct arterial impact on the economy. The catastrophe has caused a profound drop in growth, a rise in unemployment, widened inequality and increased poverty. The economic decline can adversely impact the health sector. When money circulation goes downhill, there will be lower tax returns. Moreover, as announced by several governments, the weight of the stimulus packages will be heavier to have a recovery in the balance sheet.The World Bank estimates that globally about 1.7 billion adults still do not have any bank account. However, digital payments through a mobile device are getting popular, and hopefully, it would soon help widen the aspect of financial inclusion.This financial technology has been highly beneficial in reaching out the government’s initial stimulus package of Tk 5,000 crore to the workers of export-oriented garments industries last year. About 45 per cent of it was channelled through bKash, 29 per cent through Rocket, and the rest by other MFS providers.It is now well-accepted that MFS has been acting like a life jacket, giving us a sense of assurance in cruising through the pandemic challenges. The consumers’ reliance on MFS has strengthened a lot and would continue to grow as they realise the comfort, safety and convenience of using MFS. As digital transactions will become the new normal, it would also help narrow down the digital divide sooner than expected.
IDLC Investments wins FinanceAsia ‘Best Investment Bank’ title
IDLC Investments has recently been accorded a “Best Investment Bank in Bangladesh” title at FinanceAsia Country Awards 2021. Operational for over two decades, the non-banking financial institution was issue manager for Bangladesh’s “biggest” IPO and “only” listed company in engineering construction during the Covid-19 pandemic. It also completed a merger and acquisition in the power sector and acted as trustee of a “first-ever” Basel III-compliant contingent convertible perpetual bond.