Shenzhen Stock Exchange: The Capital Market Promotes the Belt and Road Initiative to Recapture Fruits

Shenzhen Stock Exchange: The Capital Market Promotes the Belt and Road Initiative to Recapture Fruits

The FINANCIAL -- The Chinese Consortium, led by Shenzhen Stock Exchange (SZSE) and formed with Shanghai Stock Exchange (SSE), and Dhaka Stock Exchange (DSE) signed the Share Purchase Agreement in a ceremony held on May 14th, 2018 in Dhaka, Bangladesh.

Bangladesh Finance Minister Abul Maal A. Muhith, Chairman M. Khairul Hossain of Bangladesh Securities and Exchange Commission, Li Guangjun, Economic and Commercial Counsellor of the Embassy of the People’s Republic of China, Wang Jianjun, President and Chief Executive Officer of SZSE, Pan Xuexian, Chair of Supervisory Board of SSE, and representatives of Bangladesh’s financial sector, SZSE, SSE and DSE attended the ceremony.

Mr. Wang Jianjun, President and Chief Executive Officer of SZSE, Mr. Pan Xuexian, Chair of SSE's Supervisory Board, and Mr. K.A.M. Majedur Rahman, DSE managing director, signed the agreement. According to the agreement, the Chinese consortium acquires 25% stake (around 450 million shares) in DSE at 9.47 billion taka (about 120 million U.S. dollars).

In July 2017, SZSE and SSE received DSE’s tender invitation to bid for 25% of its stake. In the spirit of sincerity, practicality, cooperation and mutual benefit, the Chinese consortium conducted a four-month due diligence, eight on-site visits to Bangladesh and received DSE delegation’s three visits to China. As a result of in-depth research and mutual consultation, the Consortium developed a comprehensive bidding proposal emphasizing strengths and advantages of the Chinese Consortium and laid out a clear vision and path to deepen business and technical cooperation. SZSE also provided technical construction plans and consultancy services to DSE, including trading systems, surveillance systems, financial data exchange platforms, business management systems, and information disclosure system frameworks. It is understood that SZSE trading system has maintained a world record of safe operation for 17 consecutive years and has the highest level of system reliability in the world. SZSE trading system and market surveillance system can handle 300,000 orders per second, 400 million orders per day, support 50,000 securities and 300 million investor accounts, and has high availability, flexible scalability, and high security. In addition, SZSE will provide technical training services for DSE, providing continuous capacity building for its long-term development, according to Shenzhen Stock Exchange.

Mr. Wang Jianjun, on behalf of the Consortium, addressed the ceremony. He pointed out that capital market cooperation is an important initiative to implement Belt and Road Initiative, and an innovative measure to establish market infrastructure connectivity in cross-border capital markets. Thanks to leadership of China Securities Regulatory Commission and support by all relevant parties, the SZSE-led Consortium succeeded in its bid for 25% stake in DSE and has obtained approval as its strategic investor.

As Mr. Wang mentioned, the Consortium, as the strategic investor of DSE, will work in compliance with Bangladeshi laws to advance cooperation in key areas such as trading technology, market cultivation, and product development in an orderly manner. The Consortium will work alongside Bangladesh’s securities regulators, member shareholders of DSE and other market participants to further deepen Sino-Bangladesh capital market cooperation and promote the building of Sino-Bangladesh "Financial Corridor".

Mr. Muhith said that China is one of the most important strategic partners of Bangladesh. Bangladesh is an important strategic partner of China. Bilateral economic, trade and infrastructure cooperation enjoys sound development momentum, and capital market cooperation has broad prospects. The Consortium is expected to inject new vitality to Bangladesh’s capital market reform, and facilitate the common development in real economy, giving full play to its role as DSE’s strategic investor.

In his speech, Dr. Hossain said that Bangladesh’s capital market community highly appreciates Chinese capital market’s achievement and welcomes the Consortium as the strategic investor of DSE. It is hoped that the Consortium will make contributions to DSE’s market development and Bangladesh-China capital market cooperation based on its technical and business advantage.

In its next step, SZSE will facilitate Sino-Bangladesh capital market cooperation and explore new path and new platform of capital market cooperation within the framework of Belt and Road Initiative. SZSE will continue to promote innovative development and opening up in the financial sector, and strive to build the world’s leading innovative capital formation center.