Finding investors for DSE is top priority: new chief

The new managing director of Dhaka Stock Exchange said he would attach top priority to finding strategic investors for the demutualised bourse by December.

“Getting strategic investors within the stipulated time is a major challenge for all of us -- for the stockmarket, for the bourse and for the regulator,” KAM Majedur Rahman said yesterday.

Once the DSE gets reputed institutions or international stock exchanges as strategic partners, it will be able to help the market be more confident, he said.

“Before that, we have to improve the image of our market,” Rahman said, sharing his future plan briefly with a group of reporters at the DSE.

The bourse has already started communicating with globally renowned institutions to encourage them to be strategic partners, he said.

“We can recommend a time extension from the regulator, but we have to try to achieve the target by the deadline.”

In December last year, Bangladesh Securities and Exchange Commission asked the officials to find strategic investors in a year, as the twin stock exchanges could not find any strategic investor despite being demutualised in 2013.

Under the demutualisation scheme, 25 percent shares of the bourses are kept in a block account for strategic investors, while another 35 percent are set aside for institutional and individual investors.

The remaining 40 percent are owned by existing shareholders, who are commonly known as stockbrokers and stock dealers.

As per the demutualisation scheme, which was approved by the BSEC in September 2013, a strategic investor should have the experience of managing exchanges or a business so that the tie-up could form an effective synergy.

Foreign stock exchanges, banks, financial institutions, technology firms and institutional equity investors can be counted as strategic investors and they can purchase shares in Dhaka and Chittagong stock exchanges.

Although the 13-member board of a bourse includes a director from strategic investors' category, the post still remains vacant, as the bourses are yet to get any strategic investor.

“It will be unfortunate if the bourses cannot sell shares to the strategic investors within the stipulated time,” BSEC Chairman M Khairul Hossain said on Saturday.

He said increasing revenue generation, introduction of new products, activating trading of government treasury bonds and introducing a separate platform for small and medium companies will be the other major tasks for him.

“But these tasks cannot be done overnight,” Rahman said, who has been in the banking industry for 33 years.

Taking questions on increasing operational revenue instead of interest income, Rahman said the DSE has a data bank and most of the information is being given free of cost.

“We have to improve presentability and then we can make more operational revenue from data.”

Rahman said the stockmarket is the suitable place for companies to raise required capital that cannot get the finance from the banking sector for many reasons.

The DSE will work together with other stakeholders to bring big and fundamentally sound companies, including the multinational ones, to the stockmarket, he said.

Prior to joining the DSE, Rahman was serving US-based eCurrency Mint Incorporation as a consultant.

Rahman had also worked as the managing director of Premier Bank and country head of Bank Al-Falah.

He started his career in 1981 with ANZ Grindlays Bank as a management trainee.