In order to strengthen the functioning of the small and medium enterprises (SMEs), the Chinese consortium of Shenzhen Stock Exchange (SZSE) and Shanghai Stock (SSE) have tied up with the Dhaka Stock Exchange (DSE).
The consortium will be creating an SME-based board, which will enable startups to raise funds from the capital market. It will focus on product diversification, as well as innovation. This will create a number of options for the investors to invest in.
A round-table styled ‘Bangladesh-China capital markets’ was organized by the Policy Research Institute (PRI) in association with SZSE and SSE, at the Dhaka’s Hotel Le Meridien, on May 15, 2018.
The discussion with Zaidi Sattar, Policy Research Institute (PRI) Chairman, included Ahsan H Mansur, PRI executive director, Wang Jianjun, General Manager of the Shenzhen Stock Exchange (SZSE), and Salman F Rahman, adviser for private sector development to Bangladeshi Prime Minister.
Wang Jianjun, President and Chief Executive Officer of SZSE, said, “It will help boost the SMEs as well as the capital market.”
SMEs do not generate as much money as large corporations. Yet, they contribute to the economy in different ways. These businesses bring growth and innovation to the community, provide employment opportunities, and attract talented people who bring new products and solutions for the existing ideas. Besides, they generate employment for people who are unable to work for large corporations.
Salman F Rahman, an advisor for the private sector development to the Awami League president, expressed his disappointment on how the small and medium companies struggle to raise funds from the capital market.
“Startups need more funding, but our regulators do not give approval for new companies to raise funds. This mind set needs to be changed,” he said.
The legal advisor of the President, Salman F Rahman is also the Vice Chairman of one of the largest private sector groups in Bangladesh, Beximco Group. It is a conglomerate that operates across a wide range of industries, including pharmaceuticals, textiles, hospitality, marine food and others.
Through his business, Salman F Rahman has been immensely contributing to the development of the private sector of Bangladesh. His vision and leadership has also been contributing in building a corporate culture in the country.
He also expressed that there is a need to enlarge the institutional investor base, build a larger foreign portfolio, and attract foreign companies to Bangladesh. For this, the Chinese consortium and the DSE will have to work together.
Liu Fuzhong, a director of SZSE, anticipated that just like in China, SME-based board will foster the sector in Bangladesh as well.
Talking about how the sector in China is creating employment opportunities, he said, “The SME sector in China has bloomed.” He also added that only 20 per cent Chinese SMEs rely on banks for loans. Whereas, the rest depend on the capital market to raise funds.
In its proposal, SZSE offered to assist the DSE in developing bonds, index-based products, asset-backed securities and derivative market. Apart from the development of an SME market in Bangladesh, the alliance between the two countries will also assist in information disclosure, investor suitability management, market design, supervision, IPO promotion and other areas of interest.