The Chittagong Stock Exchange (CSE) reported a net profit decrease of 11% to Tk34 from Tk38 in FY23 compared to FY22. EPS dropped from Tk0.61 to Tk0.54. This decline in profitability was primarily attributed to the implementation of a floor price mechanism by the BSEC in July 2022. This mechanism aimed to stabilize the stock market by preventing stock prices from plummeting. As a result, many companies’ share prices were stuck at floor levels, leading to decreased transaction activity and reduced income for CSE.
Another contributing factor to the reduced profit was a decrease in listing fees, driven by a decline in regulatory approvals for new companies’ listings and lower turnover. The BSEC’s decision to allow only five companies to raise funds through initial public offerings (IPOs) in FY23, compared to 12 in the previous year, further limited CSE’s sources of income. CSE recommended a 5% cash dividend for its shareholders for FY23, indicating its commitment to providing returns to investors. The impact of the floor price mechanism on CSE’s financial performance underscores the delicate balance between market stability and the profitability of stock exchanges.