Boards of the demutualised exchanges are under pressure for dividend disbursement for being profit-oriented organisations and for attracting foreign strategic partners, officials said.
They said earlier the move for demutualisation was successful, following the shareholders' expectation of receiving dividends from demutualised exchanges.
While talking to the FE, some of the top officials of both the stock exchanges said they are trying their level best to pay dividend. However, its disbursement will ultimately depend on the respective board's decision.
Dhaka Stock Exchange (DSE) managing director Dr. Swapan Kumar Bala said at a meeting with some members of the Asian Development Bank (ADB) board of directors Monday that their main challenge is to turn the demutualised exchange into a profit-oriented organisation.
The bourses' incomes come from interest of Fixed Deposit Receipt (FDR), listing and training fees, transaction volume and number of trades (howla).
Their main income comes from FDR interest, as both the exchanges have kept a substantial amount of fund in the form of FDR. Recently, the income from FDR has declined due to reduced interest rate.
"As part of various initiatives to boost income, we are working to introduce new products, such as Exchange Traded Fund (ETF), which will be launched by this
December," the DSE MD said.
"At the same time, we are helping four new Trading Rights Entitlement Certificate (TREC) holders to start their operation soon. It will also increase the market volume," he added.
DSE will also facilitate some institutional investors to expand their business by opening braches in divisional headquarters, he said.
Chittagong Stock Exchange (CSE) managing director Syed Sajid Husain said before the demutualisation they made presentations that created expectation among the shareholders of receiving dividend.
"As a demutualised exchange it's our responsibility to ensure dividend to the shareholders. Besides, foreign strategic partners will not be interested to purchase blocked shares of the exchange, if it fails to show profitability," he also said.
Meanwhile, some of the TREC-holders, who were in the boards of the exchanges before the demutualisation, claimed that the incumbent boards have failed to reduce unnecessary expenses.
DSE director Md. Shakil Rizvi, who earlier served the bourse twice as president, ruled out the claim, saying the incumbent board is scrutinising the pros and cons of all expenditures.
"The demutualised exchange is yet to pass one year. By this time unnecessary expenditures are under control. The TREC-holders' expectation for dividend is not unusual. But they should consider the exchange's transition also."
He said the exchange has opened a regulatory department to ensure good governance. "The demutualised exchange will fail to achieve its targets, if it cuts the expenses of capacity building," he stated.
Modern Securities Limited managing director Khugesta Nur-E-Naharin said when an exchange becomes demutualised, its shareholders can expect dividend and good governance.
"Simultaneously, we should also consider the period that the exchange has passed after completion of the demutualisation," she added.
Parliament passed the Exchanges (Demutualisation) Act 2013 Bill on April 29, 2013. The securities regulator approved the demutualisation scheme on September 26, 2013 by setting the provision of appointing majority number of independent directors in the boards. The board of demutualised DSE took responsibility on February 14, 2014.
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