The Chinese consortium of Shenzhen and Shanghai stock exchanges on Tuesday joined the Dhaka Stock Exchange as its strategic shareholder through purchasing 25 per cent shares of the Bangladesh’s premier bourse.
On the day, the DSE announced the consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange as its strategic partner at a press conference held by the DSE at the Pan Pacific Sonargaon Hotel in Dhaka.
DSE managing director KAM Majedur Rahman said, ‘The Chinese consortium deposited Tk 947 crore in Standard Chartered Bank Bangladesh that was transferred to the DSE’s account with City Bank and the bourse credited shares to the consortium members’ beneficiary owners’ accounts as per an SPA (share purchasing agreement) signed earlier.’
The Chinese group also paid Bangladesh government Tk 15 crore as stamp duty, he said.
He said that SZSE deputy director general (technical management committee) Xie Wenhai was appointed as director to the DSE board of directors at a meeting held at 11:00am on Tuesday.
‘The bourse firmly believes that materialisation of the group’s cooperation in technology, market cultivation, and product development in an orderly manner will contribute to taking forward the business of the DSE to growth path and the bourse becoming an international-grade stock exchange,’ Majedur also said.
Xie Wenhi said that after the transaction, the Chinese consortium had become officially strategic investor and shareholder of the DSE.
The transaction will be an ‘iconic’ or ‘exemplary’ project for the emerging markets, he said.
The consortium will focus on technological improvement, foundation building and capital building in the DSE to increase ability of the capital market for serving the economy of Bangladesh, he said.
He also informed that six IT business professionals from the Shenzhen Stock Exchange were now conducting technical research at the DSE.
‘We are trying to develop a cross-border capital market serving system between China and Bangladesh,’ he said.
He also said that they would work hand in hand regarding technical development of the DSE and provide supports in the bourse’s business.
SZSE international department director Liu Fuzhong said that the consortium would work to develop infrastructure, business building and capacity building of the DSE so that the resources are efficiently used.
The group will also work on electronic information disclosure tools, market surveillance and integrity that are the power of any stock exchange, he said.
In accordance with the share purchase agreement signed between the parties on May 14, the consortium transferred Tk 947 crore against 45,09,44,125 ordinary shares of the DSE at Tk 21 each to be the bourse’s strategic investor, DSE officials said.
The Bangladesh Securities and Exchange Commission on May 3 approved the DSE’s proposal for selling the shares to the Chinese consortium, ending three months of uncertainty over the issue.
SSE executive director (global business development department) Yang Jinzhong and directors of the DSE were also present, among others, at the press briefing.
The Chinese consortium got the nod from China’s National Development and Reform Commission, State Administration of Foreign Exchange and China Securities Regulatory Commission to send the fund to Bangladesh.
Bangladesh Bank also approved the DSE’s proposal for non-resident investors taka account in favour of the Chinese consortium to facilitate the fund transfer.
The Chinese consortium offered technical assistance worth over $37 million to the DSE and the BSEC asked the
bourse to evaluate technical and financial offers of the group for the interest of the country’s capital market.
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.