Brokerage industry needs concessional loans to pay salaries 

The ongoing shutdown is depriving stockbrokers of an approximate daily revenue of Tk2 crore and most of them are struggling to pay employees' salaries. 

To keep the brokerage teams afloat, in addition to regular salaries, the firms need concessional loans, said industry people. 

Minhaz Mannan Emon, managing director of BLI Securities Limited and also a board member of the Dhaka Stock Exchange (DSE), told The Business Standard that the brokerage industry has been struggling to pay employees' salaries, office rent and utility bills because of the bearish market condition over the years. 

The ongoing shutdown has further deepened the crisis, he said.  

Sharif Anwar Hossain, managing director of Sahidullah Securities and president of DSE Brokers Association, said the active brokerage firms managed to pay salaries for March despite a poor revenue. 

But they are too worried over how to pay the bills and salaries for April, he said.  

"Even before the shutdown, the market was stuck at a floor price with a poor turnover. Now we do not know what the market condition and our commission income after the pandemic will be." 

The brokerage industry on average charges 0.025-0.030 percent on trading turnover at the exchanges. Of that, bourses and depository service provider Central Depository Bangladesh Limited gets 0.002 percent. 

The National Board of Revenue gets 0.005 percent. 

If the average daily turnover in the stock market is considered to be Tk400 crore, the brokerage industry is missing daily income of at least Tk2 crore, said brokers. 

Despite this, we are bound to pay all the fixed costs, they said. 

The two stock exchanges have over 335 active brokerage firms, who have at least 8,000 permanent employees, including market experts, brokerage professionals, and accounts, management and IT professionals. 

Including the support staff, the number will be much higher, said DSE Brokers Association President Sharif Anwar. 

Minhaz Mannan said the industry needs loan support where there should be interest waivers until the crisis is over. 

Firms can pay back the principal along with tolerable interests, he said. 

He also opined that the National Board of Revenue should refrain from collecting 0.005 percent advanced tax on turnover value until the industry overcomes losses. 

All the stakeholders of the capital market will write to the government seeking such support to overcome the crisis. 

Many exchange members now fear layoffs and pay cuts in the brokerage industry if they get no support. 

Some brokerage firms, including the industry leader LankaBangla Securities, have already gone through scale down measures like firing or pay cut this year.