Stakeholders getting twitchy over DSE strategic investor’s role in market dev

Mostafizur Rahman | Published: 00:00, Mar 12,2019 | Updated: 23:31, Mar 11,2019

 
 

A file photo shows the Dhaka Stock Exchange building at Motijheel in Dhaka. Frustration is creeping into the mind of stakeholders of Dhaka Stock Exchange over the role of bourse’s strategic partner, a joint venture of two Chinese bourses, as they have found no visible initiative of market development from the partner after six months of its joining DSE.— New Age photo

Frustration is creeping into the mind of stakeholders of Dhaka Stock Exchange over the role of bourse’s strategic partner, a joint venture of two Chinese bourses, as they have found no visible initiative of market development from the partner after six months of its joining DSE.
The Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange on September 4 last year joined DSE as its strategic shareholder by purchasing 25 per cent shares of the Bangladesh’s premier bourse for Tk 947 crore.
DSE officials said that the consortium was yet to make any contribution to the market development or policy development in six months.
‘They [the consortium] have some development plans but many of them are hard to implement in Bangladesh context and those will take long time to execute,’ said an official.
DSE board members and officials had earlier hoped that the consortium would bring huge investments.
‘But, we haven’t found any specific move from the consortium to bring investments to Bangladesh,’ said an official.
He said that the director appointed by the consortium in DSE board joined the board meeting through video conferencing and the board hardly got any input from the director in its regular activities.
‘The market is going through rough patches in recent times and facing liquidity shortage. It would have been good for the market if there was more foreign investment,’ said a stockbroker.
He said that DSE should seek more support from the consortium to find out deficiency of the market and suggestions for enforcement issues.
The Chinese consortium offered technical assistance worth over $37 million to DSE in training and consulting services that are yet to begin.
DSE director Minhaz Mannan Emon told New Age that the consortium had placed a development scheme before the DSE board and the board would discuss the matter with the group.
He also said that the market might get benefit after a period of time.
The consortium mostly emphasises IT infrastructure development, which is time consuming, he said.
The board is optimistic that the consortium would play a vital role in developing the capital market of the country, Emon said.
The DSE members have got Tk 947 crore from the Chinese consortium by selling 45,09,44,125 ordinary shares at Tk 21 each and fund is being invested in the market.
SZSE deputy director general (technical management committee) Xie Wenhai has been appointed as director to the DSE board of directors.
Bangladesh Securities and Exchange Commission on May 3 last year approved the DSE’s proposal for selling the shares to the Chinese consortium.
The sales of strategic shares came five years after the stock exchange was demutualised to separate the ownership from its management.
Under the demutualisation, 40 per cent shares of the DSE were credited to the DSE members’ accounts, while the remaining 60 per cent were kept in a blocked account. The Chinese consortium bought 25 per cent shares from the blocked account and the bourse would float the remaining 35 per cent through an initial public offering.

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