Dhaka Stock Exchange recommends 1.7% cash dividend for FY25, lowest in nearly a decade

The Dhaka Stock Exchange (DSE), the country's premier bourse, has recommended a 1.70% cash dividend for the fiscal year 2024-25, marking the lowest payout in nearly a decade.

According to a price-sensitive statement issued by the bourse, the annual general meeting (AGM) to approve the dividend has been scheduled for 18 December, with the record date set for 10 November.

Available data shows that the DSE's dividend payouts have been gradually declining over the years. In FY16-17, it had paid a 10% cash dividend. Since then, the payouts have steadily fallen: 6% in FY22, 4% in FY23, and 3.3% in FY24. The current recommendation of 1.7% underscores a continued erosion of shareholder returns.

The decline reflects the bourse's financial performance. During the last fiscal year, earnings per share (EPS) dropped 49% year-on-year to Tk0.173, with a net asset value of Tk10.42 per share and a negative net operating cash flow of Tk0.168 per share. 

DSE sources revealed that the exchange incurred Tk49 crore in losses from core operations—including transaction fees, charges from listed companies, data sales, licensing fees, and training academy income.

However, the bourse's non-operating income helped offset these losses, with interest from fixed deposit receipts (FDRs) and bond investments amounting to around Tk100 crore, plus rental income exceeding Tk10 crore. This allowed DSE to post a net profit of approximately Tk33 crore.

The recommended dividend decision indicates the bourse's constrained ability to reward shareholders from operational earnings, relying instead on investment and rental income to sustain payouts. 

Market observers say the declining trend may influence investor sentiment, especially as DSE prepares for the eventual initial public offering (IPO) of its remaining 35% stake. Currently, around 250 brokers hold a 40% stake, while a Chinese consortium owns 25% of the bourse.