China stock market

Shanghai, Shenzhen stock exchanges get regulatory approval for stake in Bangladesh bourse

The two will take a combined 25 per cent stake in the Dhaka exchange as part of Belt and Road Initiative

PUBLISHED : Friday, 04 May, 2018, 12:11pm
UPDATED : Friday, 04 May, 2018, 4:58pm

The Shanghai and Shenzhen stock exchanges have received regulatory approval for their purchase of a combined 25 per cent stake in the Bangladesh stock exchange, part of their plans to expand overseas in line with the Chinese government’s global trade strategy.

Regulators in the two countries have approved the purchase of the stake in the Dhaka Stock Exchange, the exchanges said in separate statements. The value of the deal was not disclosed. US and Turkish exchanges had also submitted bids.

The Shanghai and Shenzhen exchanges, which have a combined capitalisation of US$7.4 trillion, have struck deals in Europe and central Asia as part of China’s “Belt and Road Initiative” – a plan to link China and the rest of the world in a vast trading and infrastructure network.

The Shanghai bourse will own a 25.1 per cent of the stake in the Astana International Exchange in Kazakhstan, which will provide financing for belt and road projects in central Asia and the Middle East through equities, bonds and derivatives.

It also has a venture with Deutsche Boerse in Frankfurt, called the China Europe International Exchange, that trades 70 funds and bonds and plans a board that will attract listings of Chinese companies to issue what will be known as D shares.

The Dhaka exchange, which started in 1954, had 303 listed companies with a combined market value of US$44 billion as of the end of December 2017. Its benchmark DSE Broad Index has dropped 8.9 per cent this year after rising 24 per cent in 2017.