Dhaka Stock Exchange (DSE) is set to start trading on its SME platform this week, two and a half years after its inauguration, aiming to create an opportunity for small-cap companies to get listed on the stock market.
Professor Shibli Rubayat-Ul-Islam, chairman of Bangladesh Securities and Exchange Commission (BSEC), will be opening the trading on 30 September, said DSE officials.
Presently the DSE SME platform will start trading with six companies.
Four of the companies – Apex Weaving and Finishing Mills, Bengal Biscuits, Himadri Ltd, and Wonderland Toys Ltd – are from the over-the-counter (OTC) market.
Master Feed Agrotec Limited and Oryza Agro Industries Ltd – which have raised funds through qualified investor offers (QIOs) – are the other two companies.
Investors having an investment of a minimum of Tk50 lakh in the capital market will be allowed to trade shares of the SME companies.
According to the BSEC order, sponsors, directors, and promoters of the companies, which have been shifted from the OTC market, must be considered as qualified investors for trading on the secondary market of the SME platform.
Investors are also allowed to take margin loans against the purchase of their shares on the SME platform.
On September 16, the BSEC abolished the OTC market and sent 23 OTC firms to the SME platform.
Besides, 18 companies were sent to the alternative trading board.
Finance Minister AHM Mustafa Kamal inaugurated the small-cap companies' board on 30 April 2019.
Over the period, no small-cap company got approval for getting listed on the DSE.
On 14 July 2021, BSEC allowed Master Feed Agrotec Limited and Oryza Agro Industries Ltd for QIOs.
Initially, some companies had applied to the commission for entering the SME platform. But a few of them withdrew their applications while several others were cancelled by the regulator.
After that, the stock exchange tried to create opportunities for companies to get listed on the SME platform but failed.
Also, issue managers were not interested in bringing small-cap companies to the market as they pay low fees, they said.
They said rules for small-cap companies should be short and simple as small entrepreneurs are not as capable as the listed companies to comply with all of these rules.
In April 2021, the regulator exempted four firms from the rules regarding the QIO to list them on the SME board of the bourses.
Later, Master Feed Agrotec, Subra Systems Ltd, Oryza Agro Industries Limited, and Mostafa Metal Industries applied for QIOs.
On the other hand, on 10 June 2021, the Chittagong Stock Exchange (CSE) started trading on its SME platform with only Nialco Alloys Limited.
Final approval was granted to the Bangladesh Securities and Exchange Commission under (Qualified Investor Offer by Small Capital Companies) Rules 2018 with some changes and amendments by BSEC in November 2018.