DSE to sign MoU with strategic partners within December 12

Dhaka,  Wed,  07 December 2016
Published : 26 Nov 2016, 20:18:11 | Updated : 26 Nov 2016, 20:18:16

DSE to sign MoU with strategic partners within December 12

FE Report

The country's premier bourse is set to sign memorandum of understanding (MoU) with interested strategic partners by December 12 this year as per the regulatory instruction.

Foreign institutions, including local business groups, have shown interest to be strategic partners by purchasing exchange's stakes through consortiums.

"We have held several meetings with interested partners, including local ones, and exchanged views with them. We are optimistic to sign MoU within stipulated deadline," said DSE managing director K. A. M. Majedur Rahman.

According to demutualisation scheme of stock exchanges, the bourses will have to sell 25 per cent stakes to the strategic partners.

On December 13, 2015 the Bangladesh Securities and Exchange (DSE) asked the bourses to sign MoU with strategic partners as part of the process to sell shares within next one year.

As a result, the premier bourse will have to sign MoU with strategic partners by December 12 this year.

Meanwhile, some foreign institutes held meetings with the DSE and expressed their interest to be strategic partner.

The institutes are: International Finance Corporation (IFC), a member of the World Bank Group, NASDAQ, an American stock exchange, Common Wealth Development Corporation, Brummers and Partners, a Swedish Partner, KFW, a German government-owned development bank, and Kingsway Capital, an UK based asset management company.

Among the local business groups, the Square Group also showed its interest to be strategic partner with other ones.

Recently, the premier bourse published an invitation in news paper seeking submission of interest by foreign and local organisations by November 15 to be strategic partners.

Following the DSE's invitation, three other local financial institutions have showed interest of getting stakes at DSE. These are: LankaBangla, Delta Life Insurance and state-run Investment Corporation of Bangladesh (ICB).

"The parties which showed interest will come by forming consortiums. We do not know about the formation of the consortiums. It's their cup of tea," said the DSE managing director.  

He said the DSE would also give importance on the development supports that could be realized from strategic partners.  

The foreign partners meanwhile held meeting with the DSE board of directors.

Another multinational professional services firm Ernest & Young recently made its presentation at a board meeting of the premier bourse.

International professional services firm Pricewaterhouse Coopers also showed interest about stakes at DSE.

As per the demutualisation scheme approved by the Bangladesh Securities and Exchange Commission (BSEC) on September 26, 2013, the DSE shareholders primarily got 40 per cent of their stakes along with receiving TREC (trading rights entitlement certificate) certificates.

And the remaining 60 per cent of the shares were transferred to a block account and kept for the TREC holders, strategic investors and individuals.

Of 60 per cent stakes, one or more foreign strategic partners will be allowed to purchase 25 per cent and local institutional investors and individuals will be able to purchase the remaining 35 per cent stakes.

By holding 25 per cent shares, the strategic partners will also hold a position in 13-member board of the exchange.

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