Lack of confidence and liquidity shortage are the main problems of the capital market in Bangladesh, and the first priorities of the consortium of Shanghai and Shenzhen stock exchanges would be to develop strategies in solving these problems.
Chairman of supervisory board of Shanghai Stock Exchange Pan Xuexian said it to the FE in an interview on Tuesday. He was in the city to attend the deal signing ceremony with Dhaka Stock Exchange (DSE) that took place on Monday.
The Chinese consortium, comprising Shenzhen Stock Exchange and Shanghai Stock Exchange, signed an agreement with the DSE to acquire its 25 per cent stake and become a strategic partner.
Mr Pan said that bringing efficiency in the operations of the country's premier bourse and ensuring transparency are crucial to restore confidence of general investors and resolve the liquidity crisis.
"I always believe that ensuring a well-run, well-managed, fair, open and efficient stock market is very important for attracting investors."
"So far we understand that the problems here are lack of confidence and liquidity crunch. We want to devise and implement strategies to solve these problems so that investors can be attracted - not only the local investors, but also the foreign investors. We want to develop ways to inject liquidity in the market also."
Highlighting the role of stock market as a prime source of financing, he said, "We are talking about SMEs, we are talking about bonds, and we are talking about different kinds of companies. But why don't we raise funds from stock market? Somehow we have to do it, so that stock market can be a source for raising funds."
"Look at the stock exchanges in Shanghai and Shenzhen, and how they have overcome hard times. So, through sharing their experiences they can benefit DSE too."
On China's policy about building such partnership, he said Chinese policy is to extend cooperation for development of the neighbouring countries as well as for expanding their trade.
"We want to develop a system to improve the trade balance. We want to share a bigger pie of the trade, not just taking and taking (from here)."
Responding to a question, he said the focus should be on the infrastructure development projects also.
The presence of infrastructure building companies and, power and energy sector companies is very strong in the capital markets of China and other developed countries. They constitute 10 to 20 per cent of the market. "So we have to look into that aspect also," he noted.
He said the Chinese consortium's becoming the strategic partner of DSE will support the development of Belt and Road Initiative (BRI) and will foster cooperation along the Bangladesh-China-India-Myanmar Economic Corridor.
"We will cooperate with DSE on trading technology, market and product development," he added.
mirmostafiz@yahoo.com