CSE gets BSEC nod to make ABG Ltd its strategic partner

ABG to buy 25pc shares of CSE

FE REPORT | Thursday, 29 September 2022

The stock market regulator has approved a proposal of Chittagong Stock Exchange (CSE) to make ABG Ltd. its strategic partner, after nine years of demutualisation.
The approval came at a meeting of Bangladesh Securities and Exchange Commission (BSEC) held at its office on Wednesday, with its chairman Prof. Shibli Rubayat Ul Islam in the chair.
ABG Limited is a concern of Bashundhara Group, a leading conglomerate in the country. ABG Ltd will buy 25 per cent shares of the CSE worth Tk 2.40 billion, with each share priced at Tk 15, officials said.
In August, the CSE applied to the BSEC for its approval. Before that, the CSE board of directors approved the proposal of ABG Ltd to become the strategic partner.
In August, ABG Ltd also gave a detailed presentation to the BSEC where Bashundhara Group's Managing Director Sayem Sobhan Anvir, also the managing director of ABG, was present.
ABG Limited is working in a joint venture with a US-based company for necessary technical support in managing the stock exchange, officials said.
After the stock market crash 2010-11, stakeholders demanded that the government ensure monitoring to check manipulation and bring transparency to the market to restore investor confidence. Following the demand, the demutualisation act was passed in parliament in 2013.
According to the demutualisation scheme, 40 per cent of the CSE's shares were credited to its members' accounts while the remaining 60 per cent were kept in a blocked account.
Of the 60 per cent, 35 per cent shares would be offered through initial public offering to institutional and general investors, while the remaining 25 per cent will have to be sold to the strategic investor.
After becoming the strategic partner of CSE by buying 25 per cent shares, the ABG Limited will also hold a position in the 13-member board of the exchange in line with the demutualisation scheme.
The CSE was established in 1995. Currently, its paid-up capital is Tk 6.34 billion and the number of shares is 634.52 million. It had paid a 4.0 per cent cash dividend to its shareholders for the financial year 2020-21.
As of June 30, 2021, the CSE's net profit was Tk 283.49 million, which was Tk 318.81 million in the previous year.
At the same time, its earnings per share (EPS) were Tk 0.45 and its net asset value per share was Tk 11.75.
Since 2016, the securities regulator has been extending the time for picking strategic investors based on the CSE's applications.
In September 2018, the Dhaka Stock Exchange (DSE) transferred 25 per cent of its shares to strategic investors -- the Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange.

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