Dhaka Stock Exchange, the country’s premier bourse, has sought grants from Business Finance for the Poor in Bangladesh, a programme funded by British government, to launch a small capital board at the bourse.
The bourse and market regulator Bangladesh Securities and Exchange Commission made the approach of creating a separate board for small-capitalised companies at the stock market as a move for market diversification and vibrancy.
To run the separate board, DSE has recently initiated a project proposal named ‘Ease of access to equity financing for small and medium enterprise’ to promote SMEs for growth and development and subsequently listing with the small capital platform, a senior DSE official said.
The bourse has estimated the total cost for the project at Tk 2.74 crore and participated in a competition conducted by BFP-B to get fund. In the programme, it appealed for 50 per cent of the cost, which is Tk 1.37 crore.
Under the project, DSE has targeted to list 20 SMEs in the first year and 30 SMEs in the second year. The listing would enhance the market capitalisation to Tk 300 crore in 2019 and Tk 500 crore in 2020.
Any company with paid-up capital between Tk 5 crore and Tk 30 crore can apply for getting listed with the board.
To familiarise the trading platform for SMEs, user acceptance testing and user training will be started from next month. DSE is planning to start call for application of fund raising for SMEs from this month, DSE officials said.
DSE has looked for grants from foreign or local funds which work for the interest of SMEs amid continuous profit decline of the bourse.
According to DSE sources, profit of DSE declined to Tk 104.56 crore in the financial year of 2017-18 from that of Tk 123.91 crore in FY 2016-17. DSE officials said that the bourse needed a large amount of money to execute its business plans especially in the IT sector, but lack of revenues became major barrier to the development.
BFP-B approved the project for matching grant of maximum 50 per cent under current round.
According to the BFP-B’s payment of funds’ conditions, DSE will spend the necessary expenditures from the project budget and then claim to BFP-B for their contribution.
BFP-B is a 25-million pound UK aid facility to create economic opportunities for small business by changing the behaviours of market actors in the financial sector.
Nathan Association London Limited, in consortium with Oxford Policy Management, is the management agency for the BFP-B programme.
At first, DSE will initiate the marketing and promotional activities to aware SMEs for fund raising through the SME platform of DSE.
Later on, 60 SMEs will be shortlisted for listing in the small capital platform by providing BDS support services especially on reporting and corporate governance issues.
BSEC has finalised rules for ‘qualified investor offer by small capital companies’, making it mandatory minimum Tk 2 lakh transaction at a time, a BSEC official said.
In case of the paid-up capital of a SME company crossing Tk 30 crore, such company must compulsorily apply for listing with the main board, the rules said.
Source: New age.
