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DSE's journey with the Chinese consortium kicks off

  • Published at 09:06 pm September 4th, 2018
DSE holds first board meeting with Chinese consortium as strategic partner
Dhaka Tribune

The DSE formally announced the Chinese consortium as its strategic partner in a press conference

The Dhaka Stock Exchange (DSE) has held its first board meeting with the Chinese consortium of the Shenzhen Stock Exchange (SZSE) and the Shanghai Stock Exchange (SSE) as strategic partner.

The meeting took place at the DSE head office in Dhaka yesterday, after the transfer of 25% shares of DSE to the consortium’s Beneficiary Owners (BO) Account. As per the Share Purchase Agreement (SPA), the consortium transferred Tk962 crore for the shares to the DSE on Monday.

After the meeting,the DSE formally announced the Chinese consortium as its strategic partner in a press conference at the capital’s Pan Pacific Sonargaon Hotel.

DSE Managing Director KAM Majedur Rahman, Chairman Dr Abul Hashem, SZSE IT Management Committee Deputy Director General Xie Wenhai, and Director (Hong Kong, Macao and Taiwan Affairs) Liu Fuzhong, were present at the conference among other high officials from the DSE and the consortium.

Under the SPA, Xie Wenhai has become a DSE board member. While addressing the press conference, he said: “We will develop our cross border relationship in the capital market. By incorporating the SME board in the DSE, we will work towards contributing to the real economy of Bangladesh.”

He added that the consortium would also work hard to improve the DSE’s technology, so that the stock exchange can develop its business and establish strong corporate governance.

DSE Chairman Dr Abul Hashem said: “The DSE has become partner to one of the largest stock exchanges in the world by joining up with the Chinese consortium. Through this partnership, the DSE will be brought in line with international standards of stock exchanges.”

SZSE Director Liu Fuzhong said the consortium chose to partner with the DSE as Bangladesh is a growing economy and the country’s market has high potential.

“Improvements in technology are very useful for market expansion, so we will focus on this first. Then, we will work towards building the capacity of the DSE by sharing the experiences of the Chinese capital market. We will also improve the surveillance and trading system to boost investor confidence, and work towards introducing new products to the stock market,” he added.

Liu Fuzhong further said that China has over 11,000 qualified institutional investors, who are heavily interested in Bangladesh’s capital market. “I hope they (Chinese investors) invest a sizeable amount, but first we need to improve the understanding between the stock exchanges of the two countries and improve the DSE’s system.”

DSE Managing Director KAM Majedur Rahman said: “Through this strategic partnership with the consortium, we will advance long-term cooperation in key areas such as technology, market cultivation, and product development, in an orderly manner, to achieve higher-quality and growth of the market and economy.”

He added that DSE firmly believes this cooperation will develop Bangladesh’s capital market into an international standard stock exchange.

On May 14, 2018, DSE signed a memorandum of understanding with the Chinese consortium to sell 25% of DSE’s shares to the consortium to make it a strategic partner of the bourse.

According to the Share Purchase Agreement (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 for infrastructure and technological development, on top of the Tk947 crore for the DSE shares.

According to the Stock Exchange Demutualization Act 2013, 40 % of DSE shares are credited to DSE member accounts, while the remaining 60% has been kept in a blocked account. After selling 25% of its shares from the blocked account to the chinese strategic investor, the bourse shall float the remaining 35% through an initial public offering (IPO).