DSE transfers 25pc stake to Chinese partner Tuesday

FE Report | Published: September 02, 2018 09:26:35 | Updated: September 03, 2018 09:40:00


The Dhaka Stock Exchange (DSE) will formally transfer 25 per cent of its shares to its Chinese strategic partner on Tuesday next on receipt of the stipulated amount of fund.

On the same day, the DSE and the Chinese consortium comprising Shenzhen Stock Exchange and Shanghai Stock Exchange will hold a joint press briefing at a city hotel.

Officials at the DSE said a delegation of the Chinese consortium is scheduled to arrive in Bangladesh tomorrow (Sunday).

"The joint press briefing will be held after completing necessary formalities regarding transfer of shares to the strategic partner," said Minhaz Mannan, a DSE director.

The Chinese consortium became the strategic partner of the country's premier bourse after signing a share purchase agreement on May 14 last.

As per the demutualisation scheme, a representative of the strategic partner will sit on the board of the DSE.

The Bangladesh Securities and Exchange Commission (BSEC) approved the proposal made by the Chinese consortium for being a strategic partner of Bangladesh's premier bourse on May 03 last.

As per the BSEC approval, the DSE sold its 25 per cent stake or more than 450.94 million shares at a price of Tk 22 each. But the price declined slightly after the dividend offered by the DSE.

After transfer of the shares, 250 TREC (Trading Right Entitlement Certificate) holders of the DSE will receive around Tk 9.46 billion from the consortium. The fund will be distributed equally to the TREC holders as each of them sold 25 per cent of their share holdings.

As per Section 53 (N) of the Income Tax Ordinance, the government will get tax at the rate of 15 per cent on capital gains of the TREC holders from the fund.

The amount of the capital gains would vary from one TREC holder to another due to the differences of their costs of acquisition.

Those who will see the costs of acquisition of their respective 25 per cent shares are less than the amounts they would get by selling the same volume of stakes will have to pay tax at source, the DSE officials said.

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