Foreign investors want to buy 25pc stake in DSE

Three separate consortiums from China and India have showed interest in acquiring 45 crore shares or 25 percent ownership of the Dhaka Stock Exchange and becoming a strategic partner of the premier bourse.

The DSE has a total of 180 crore shares, the face value of each is Tk 10.

A consortium of the Shanghai Stock Exchange‎ and the Shenzhen Stock Exchange proposed buying 45 crore shares -- which is 25 percent of DSE's shares -- at Tk 22 each. They will also provide technical support of $37 million, which is about Tk 300 crore.

But the Chinese investors also demanded a seat at the DSE board.

The National Stock Exchange of India proposed Tk 15 for each share of the DSE through two different consortiums, one in partnership with the American Nasdaq and another with the private equity fund Frontier Fund Bangladesh.

All three proposals were placed at the DSE's board meeting held on Tuesday at its headquarters.

Most of the members of the board agreed to accept the proposal of the Chinese consortium as they have the experience about stock exchange investment, said a board member.  “But no decision has been made. The DSE is scrutinising the proposals,” he said, adding that the chosen proposal will be sent to the Bangladesh Securities and Exchange Commission for approval, he added.

The DSE's hunt for a strategic partner comes as part of its conditions for demutualisation in 2013, which transformed it from an entity owned by mostly brokerage-owning members into a for-profit company owned by shareholders.

The move separated the bourse's management from ownership, and was a major recommendation of the stock market probe conducted by a government panel in the aftermath of the market crash of 2011.

According to the Demutualisation Act 2013, 40 percent shares of the stock exchange's shares should be allocated to DSE members, 25 percent to international stock exchange and 35 percent to the public.

On December 9, 2015, the BSEC under the Demutualisation Act 2013 directed the DSE to get a strategic investor within a year.

The commission later extended the deadline to June 30, 2017 following a plea from the DSE.