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DSE transfers stake to Chinese partner

‘Bourse’s capacity building first priority’

FE Report | September 05, 2018 00:00:00

Dhaka Stock Exchange (DSE) handed over its 25 per cent stake to a Chinese consortium on Tuesday after completion of necessary formalities under the exchange's demutualisation move.

The premier bourse received fund amounting to Tk 9.62 billion on Monday in exchange of its one-fourth stake, which has been transferred into BO (beneficiary owner's) account of the Chinese consortium.

The consortium comprises of Shenzhen Stock Exchange and Shanghai Stock Exchange.

Now the fund will be equally distributed among the DSE Trading Right Entitlement Certificate (TREC)-holders, as each of them sold 25 per cent of respective share holdings.

After sealing all the formalities, both DSE and the Chinese consortium held a joint press briefing at a city hotel on Tuesday, where the officials concerned expressed hope to work together for further development of the country's premier bourse.

"Following implementation of the deal with the Chinese consortium, DSE has emerged as an international stock exchange after 54 years of its journey," DSE Chairman Professor Dr. Abul Hashem said.

He also said the deal of including the Chinese consortium as a strategic partner of DSE has been executed in a very transparent way.

"Our joint efforts to further strengthen DSE will continue," the DSE chairman added.

Xie Wenhai, deputy director general at IT Management Committee of Shenzhen Stock Exchange, has been nominated by the consortium to serve as a member of the DSE board of directors.

"We will work hard to develop the technical system of DSE. We will also develop cross-border capital market relationship between Bangladesh and China."

In his reply to a question, Mr Wenhai said the Chinese consortium decided to invest in Bangladesh considering the country's economic prospects.

"Improving bilateral relations between the countries as well as the available business prospects in Bangladesh encouraged us to invest here."

In his reply to another question, he said Chinese portfolio investors have strong interest in the capital market of Bangladesh.

Mr Wenhai opined that the basic understanding between the stock exchanges of both the countries should be developed to attract 'sizeable' portfolio investment to Bangladesh.

Independent capacity building of DSE will be the first priority of the Chinese consortium, he added.

DSE Managing Director K A M Majedur Rahman said the consortium will provide long-term cooperation in key areas like technology, market cultivation, and product development.

"We firmly believe that materialisation of cooperation will contribute to taking forward the business of DSE and Bangladesh capital market into a growth path. It will also assist DSE in its transformational journey towards becoming an international stock exchange."

He further said DSE is working with the securities regulator to connect the companies having good fundamentals with the stock exchanges.

"Some good companies are expected to be listed with the stock exchanges in near future," he noted.

DSE directors Md. Rakibur Rahman, Sharif Ataur Rahman, Md. Hanif Bhuiya and Minhaz Mannan Emon, among others, were also present at the press briefing.

On May 3, Bangladesh Securities and Exchange Commission (BSEC) approved the Chinese consortium's proposal for being a strategic partner of DSE.

Following the approval, DSE signed the share purchase agreement with the Chinese consortium on May 14.

The Chinese consortium earlier offered Tk 22 per share for 25 per cent of the DSE's total shares. It also offered technical supports worth nearly US$ 37 million for free.

However, the price offered by the Chinese consortium declined to Tk 21 per share following DSE's dividend disbursement.

On February 10, the DSE board of directors approved the Chinese consortium's proposal, considering its financial and technological aspects.

Another consortium, led by National Stock Exchange of India (NSE), was the second highest bidder for being the strategic partner. It offered Tk 15 per share for 25.01 per cent of the DSE's total shares.

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