Bashundhara puts forward plans to become CSE’s strategic partner

ABG Limited, a sister concern of Bashundhara Group, has put forward its plan to become a strategic partner of the Chittagong Stock Exchange (CSE).

On Monday, the company presented the plan in a PowerPoint presentation to the Bangladesh Securities and Exchange Commission (BSEC).

However, after reviewing the information presented by ABG Limited, the commission has asked the company to give more details about its technical expertise and other issues.

BSEC Chairman Professor Shibli Rubayat-Ul-Islam, ABG Limited's Managing Director Sayem Sobhan Anvir and port city bourse CSE's Chairman Asif Ibrahim were present on the occasion.

"The company has highlighted its plans to become a strategic partner, but it has been asked to provide more detailed information on technical expertise and other issues," BSEC Commissioner Shaikh Shamsuddin Ahmed told The Business Standard.

ABG Limited said it will work for the development of CSE as a strategic partner. For this, a US-based organisation will be appointed as a consultant, according to sources present at the meeting.

Bashundhara wants to be strategic partner of Chittagong Stock Exchange

Bashundhara has already discussed with three organisations based in Chicago, they added.

At the same time, the port city bourse has been asked to submit a proper valuation on the price at which the shares will be sold. Because the valuation given now is very old.

In November 2016, the Chittagong Stock Exchange (CSE) published an invitation to submit an expression of interest to be its strategic investor.

The CSE has been looking for strategic partners from India, China, the United Arab Emirates, and Hong Kong for several years.

But it failed to get a strategic partner to sell 25% of its own shares under the Demutualisation Scheme.

Finally, the local ABG Limited submitted a proposal to the CSE to become its strategic partner this year.

The CSE sent the proposal to the BSEC on 1 August.

The stock market regulator on 17 August issued a letter to the port city bourse to clarify its proposal and explain how it will work.

A consortium of two Chinese stock exchanges has become a strategic partner of the Dhaka Stock Exchange (DSE), commission sources said. Still, the DSE did not improve much.

For this, the commission is looking into the details of the strategic partner selection of CSE, so that it can play a role in increasing the capability of the bourse, they added.

According to the Demutualisation Act 2013, there is an obligation to sell 60% of blocked shares among strategic, institutional, and general investors.

Of those, 25% of the stock exchange's total shares will have to be sold to strategic investors.

After that, the remaining 35% will have to be sold to general and institutional investors through an initial public offering (IPO).  

On the other hand, 40% of the shares are owned by members of the stock exchange or brokerage firms.

Since 2016, the regulator has been extending the time to look for strategic investors every year based on the company's applications.

Earlier, in September 2018, the DSE transferred its 25% of shares to strategic investors – a Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange.

It sold 25% of shares for Tk962 crore, with each share priced at Tk21.   

Established in 1995, the current paid-up capital of the CSE is Tk634.52 crore and the number of shares is 63.45 crore. It had paid a 4% cash dividend to its shareholders for the last financial year 2020-21.

As of 30 June last year, the CSE's net profit was Tk28.34 crore, which was Tk31.88 crore in the previous year.

At the same time, its earnings per share were Tk0.45 and its net asset value per share stood at Tk11.75.