The Bangladesh Securities and Exchange Commission (BSEC) on Wednesday approved Chittagong Stock Exchange (CSE)'s proposal to make ABG Ltd its strategic partner, after nine years of demutualization.
The approval came at a meeting of the stock market regulator held at its office, 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% shares of the CSE worth Tk240 crore, with each share priced at Tk15, 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 Demutualization Act was passed in parliament in 2013.
According to the demutualization scheme, 40% of the CSE's shares were credited to its members' accounts while the remaining 60% were kept in a blocked account.
Of the 60%, 35% shares would be offered through initial public offering to institutional and general investors, while the remaining 25% will have to be sold to the strategic investor.
After becoming the strategic partner of CSE by buying 25% shares, the ABG Limited will also hold a position in the 13-member board of the exchange in line with the demutualization scheme.
The CSE was established in 1995.
Currently, its paid-up capital is Tk634 crore and the number of shares is 634.52 million.
It had paid a 4% cash dividend to its shareholders for FY21.
As of June 30, 2021, the CSE's net profit was Tk28.35 crore, which was Tk31.88 crore in the previous year.
At the same time, its earnings per share (EPS) were Tk0.45 and its net asset value per share was Tk11.75.
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% of its shares to strategic investors -- the Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange.