Dhaka Stock Exchange is working to woo qualified Chinese investors with the aim of boosting the county’s capital market, DSE officials said.
A 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.
Despite taking a number of initiatives in recent years, the capital market of the country is yet to be stable due to lack of professionalism and fund flow, DSE officials said.
Therefore, the DSE members feel urgency of uninterrupted fund flow and long-term investment in the market, they said.
DSE has already discussed with the Chinese consortium regarding the cross-boundary investors’ connectivity.
The bourse is assessing the V-Next Platform, a wholly-owned subsidiary of SZSE, to build an ecosystem across the China-Bangladesh to integrate financial intermediary services, institutional investors and projects, DSE officials said.
SZSE has offered to jointly operate the V-Next programme in Bangladesh.
The V-Next has achieved remarkable success in China with 12,000 institutional qualified investors registering, the officials said.
DSE intends to connect those 12,000 investors with the Bangladesh capital market, they said.
The bourse is not thinking about cross-border listing at this moment rather it is looking for foreign investments to keep the market stable, they said.
Besides, DSE is going to launch small-cap board, alternative trading board to facilitate derivatives, sukuk and open-end mutual fund that would need funds from high net worth investors.
Dhaka Stock Exchange Brokers’ Association president Shakil Rizbi told New Age that the association had decided to visit China to bring investors to the country’s capital market.
‘We may visit China in July,’ he said.
DBA would also involve Bangladesh Bank in the process to address the foreign currency transection issues, he said.
He said that DBA would seek support from the Chinese consortium over DSE Mobile App as the app failed to attract investors for its poor connectivity.
DSE would also assess financial data exchange platform system for interoperability with Chinese market and building cross-border connectivity, DSE officials said.
The system will facilitate to link up the financial institutions in the two countries to forge a cross-border financial community, they said.
They said the prime issue would be how the investors could trade without physical presence and how brokerage houses of the countries could be connected.
The DSE members 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.
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 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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