Bangladesh Securities and Exchange Commission has extended time for the two stock exchanges by another three months to find strategic investors as the bourses could not pick such investors within the given timeframe.
The regulator on Thursday extended the deadline to March 08, 2018 as the bourses—Dhaka and Chittagong Stock Exchange—called for more time to make such an important decision connected with the development of the capital market in the country, said a DSE official.
The bourses failed to select strategic investors for selling shares from a number of foreign consortiums because of the low prices quoted and some conditions set by them, he said.
On December 9, 2015, the BSEC under the Demutualization Act, 2013 directed the DSE to get strategic investors within a year. The commission extended the deadline by six months to December, 2017 following a plea from the DSE.
The BSEC set conditions that the bourse can sell its shares only to the organisations that would contribute to the development of its management, business and technical area.
The commission also made it clear that if domestic companies do not have such qualifications regarding the bourse’s progress, the bourse cannot sell its shares to them even if they propose higher prices for its shares.
The bourses turned their focus on the foreign companies even though they offered lower prices than the local entities. The two stock exchanges expected that the foreign companies would bring various strategies and development ideas that could be beneficial for the market in the long run.
Under the Exchanges Demutualisation Act, 2013, the BSEC has the authority to grant more time to the DSE to find a strategic investor.
According to the demutualised scheme of the stock exchange, the DSE consists of 180,37,76,500 shares or Tk 1,803.77 crore paid-up capital considering Tk 10 face value per share of the entities. Out of the total shares, 25 per cent will be sold to strategic partner.
As per the BSEC directive, the DSE will be allowed to float highest shares worth around Tk 450.94 crore to its strategic investor considering face value of each share at Tk 10.
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