The Chinese consortium of Shenzhen Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE), newly tied up with the Dhaka Stock Exchange (DSE), will focus on strengthening cooperation among think tanks to develop strong research mechanisms for the introduction of new products to make the stock market more vibrant.
Representatives of SZSE and SSE as well as researchers from both Bangladesh and China reached this consensus at an event in Dhaka’s Hotel Le Meridien on Tuesday, arranged by the Policy Research Institute (PRI) in collaboration with SZSE and SSE to discuss the consortium’s plans for the development of the DSE.
SZSE Research Institute Director He Jibao said: “The practical experience of the Chinese consortium will strengthen Bangladesh-China cooperation. Some of the ways this will be achieved will be through establishing information and data sharing mechanisms, collaboration to develop research projects, encouragement of personal communication and business guidance, the organizing of forums, and the establishment of a think tank cooperation network and platform.”
“Think tanks can provide new perspectives, ideas, and solutions for capital market cooperation. They can help enhance trust and consensus, and attract multiple organizations to participate in cooperation, and also strengthen the relevance and effectiveness of decision-making advice and provide long-term sustainable support for capital market cooperation,” he added
He further said think tanks can collaborate to provide theoretical and empirical support for the development of Bangladesh and China, track and disclose achievements and main findings in the process of cooperation, conduct public opinion studies, and effectively promote information dissemination and sharing.
Meanwhile, SZSE Director Liu Fuzhong hoped that the establishment of an SME based board will foster the SME sector in Bangladesh as it did in China.
He said the SME sector in China was now blooming, though only 20% of SME entrepreneurs there took loans from banks, while the rest raised funds from the capital market.
PRI Executive Director Dr Ahsan H Mansur recommended that a 5 year road map be created for the introduction of new products, an SME friendly board, and technological advancement through the exchange between the strategic partners, adding that the focus should be on analytical research.
Ifty Islam, chairman of Asian Tiger Capital, stressed the importance of introducing new products to the market.
“New products and a growing institutional investor base will help to reduce market volatility,” he said.
Salman F Rahman, advisor for private sector development to the prime minister, expressed his disappointment that startup companies were struggling to raise funds.
“Start ups need more funding, but our regulators do not give approval for new companies to raise funds. This mindset needs to be changed,” he said, adding that the DSE and the Chinese consortium will have to work hard to build a larger foreign portfolio and attract foreign companies to Bangladesh as well as enlarge the institutional investor base.
DSE Managing Director KAM Majedur Rahman thanked the Chinese consortium for their upcoming assistance in developing Bangladesh’s capital market.
Bangladesh Bank Chief Economist Faisal Ahmed, securities house CITIC CLSA Managing Director Edmund Chan, PRI Vice chairman Dr Sadiq Ahmed also spoke at the roundtable discussion.
The Dhaka Stock Exchange (DSE) signed a memorandum of understanding with the Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange to sell 25% of its shares to the group to make it the strategic partner of the bourse on Monday. Finance Minister AMA Muhith was in attendance as the chief guest.
According to the SPA, the consortium will hold 25% - equivalent to 450,944,125 ordinary shares - of DSE at Tk21 each in order to partner with the bourse.
The consortium has also offered about Tk300 crore on top of the initial Tk947 crore, for infrastructural and technological development.
In addition, they have proposed to develop the SME market, assist in product diversification, and jointly operate the V-Next alliance program in Bangladesh.