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20 February, 2018 01:05:51 AM / LAST MODIFIED: 20 February, 2018 11:35:28 AM

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DSE finally picks Chinese bidder

STRATEGIC PARTNER
STAFF REPORTER
DSE finally picks Chinese bidder

Standing firm on its turf, Dhaka Stock Exchange (DSE) yesterday picked the Chinese bidder as its strategic partner and holder of its 25 per cent ownership rather than an Indian bidder. The decision came in the wake of a reported tug-of-war between the bourse and its regulator Bangladesh Securities and Exchange Commission (BSEC), which wanted the DSE to settle for the second best—the Indian bidder.

After the board meeting yesterday, Dr Abul Hashem, Chairman of the DSE, told journalists that the DSE board has “finalised and approved minutes of the previous board meeting that unanimously voted for the Chinese consortium.” He said the official proposal of the DSE board will be placed to the BSEC for approval within a day or two.

The BSEC didn’t give any immediate reaction on the bourse’s decision but the market insiders said the regulator is unlikely to muddle the issue further as it has drawn criticism from different quarters for its alleged pressure on the DSE over picking the Indian bidder.

The DSE is selling one-fourth of its stake to foreign bidders. The DSE has been demutualised meaning its ownership is divided between members and outsiders to remove conflicts of interest.

After the DSE floated tender for its 25 per cent stake, a Chinese consortium of the SSE and Shenzhen Stock Exchange (SZSE) submitted a tender, offering Tk 22 a share for 25 per cent or 45.09 crore shares (worth Tk 992 crore) of the DSE.

The SZSE and SSE are among the three bourses of China, other being the Hong Kong Stock Exchange.

The Indian consortium of the NSE, Nasdaq of the USA and Frontier Bangladesh, meanwhile, quotes Tk 15 a share which results in Tk 676 crore for the 25 percent stake, a significant 47 per cent less than the Chinese offering.

The Chinese consortium also offered a free technical support to the DSE for 10 years, which is worth around Tk 307 crore, whereas the Indian consortium made no clear-cut proposal of any technical support.

 The Indian side also wanted two positions of director at the DSE. The demutualisation rules allow keeping only one board position for a ‘foreign entity’ owning its 25 per cent stake.

The Chinese consortium wanted to be a long-term strategic partner without imposing any condition, while the Indian consortium imposed the condition of retrieving investment after five years.

The Chinese consortium has already garnered necessary approval from all of its local regulators in the country for being the strategic partner of the DSE, whereas the Indian consortium hasn’t got the necessary approval from Securities and Exchange Board of India and Reserve Bank of India.

MK

 

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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