Salman F Rahman, Liu Fuzhong discuss SMEs in China- Bangladesh Capital Markets
Salman F Rahman, the adviser to Bangladeshi Prime Minister for private sector development, addresses a roundtable discussion on Bangladesh-China Capital Markets.
- (1888PressRelease) June 28, 2018 - A roundtable conference was held in Dhaka on May 15, 2018, with the motive of exchanging ideas and experiences in the field of share markets between Chinese and Bangladeshi dignitaries. The event came as a booster to further work upon capital market relations between the two nations. Bangladesh had approved of a Chinese consortium’s proposal on February to acquire a 25% stake in the country’s premier bourses.
Dhaka Stock Exchange’s (DSE) hunt for a strategic partner came to an end as China’s Shanghai and Shenzhen Stock Exchanges, the world’s fifth and eighth largest exchange, emerged as a winner in a joint bid which involved Indian, US and Turkish bourses.
Liu Fuzhong, Director of International Department, He Jibao, Research Institute Director and Wang Jianjun, General Manager of the Shenzhen Stock Exchange (SZSE) attended this event with dignitaries like Bangladeshi prime minister’s adviser for private sector development Salman F Rahman, Faisal Ahmed, chief economist of Bangladesh Bank, with Zaidi Sattar, Policy Research Institute (PRI) Chairman and Ahsan H Mansur, PRI executive director.
The demutualization of the Bangladeshi stock exchange had technical and technological support from China, which would further modernize the exchange, whilst earning profits. As a strategic partner, the Chinese consortium had offered Bangladesh to operate the V-Next alliance program in Bangladesh, as well as develop its Small and Medium Enterprises.
Despite the relatively shorter history of the Chinese Capital markets in its modern form, significant growth has been to achieve the second position in terms of size. With China's structure of holding tight capital controls, the country has isolated its capital market development from other countries. Organized by PRI, the objective of the partnership between Bangladesh and Chinese stock exchanges was to aid in common discussions in cooperation and development of capital markets of the two countries.
The proposal of the Chinese consortium included developing an SME (small and medium enterprises) market in Bangladesh, which is one of the principal driving forces in the development of the economy.
Liu Fuzhong, a director of SZSE, expressed that the board which is based on SMEs, will help Bangladesh like it did in China, and added that the sector is now creating employment opportunities.
“The SME sector in China has bloomed. Only 20 per cent of the Chinese SMEs take loans from banks. The rest turn to the capital market to raise funds,” he added.
In the event roundtable conference by PRI, Salman F Rahman expressed that there is a necessity to change the mindset by giving more importance to startups in the capital markets. “Startups need more funds, but the stock market regulator does not give approval to new companies. They have to change the mindset,” Rahman added.
SME development is a major part of Bangladesh’s National Industrial Policy of 2016, and it has been listed exclusively in its Chapter 5. While special initiatives by the government are in place to eliminate the still existing barriers to SME development, a Chinese association through its Capital markets could play a major role in helping its neighbor with existing challenges like creating skilled manpower, providing product-specific manufacturing skills to the youth, and improving productivity and product quality by adopting new technologies.
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