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China outbids India for stake in DSE
Context:
Bangladesh has agreed to sell a large stake in its stock exchange to a Chinese consortium
What has happened?
- The Dhaka Stock Exchange on February 10th had approved the Chinese offer to buy a quarter of the bourse’s 1.8 billion shares
- Bangladesh’s financial regulator has asked it to “further scrutinise” the decision.
- India’s NSE had offered 15 taka ($0.18) per share during the tender process this month.
- China’s Shanghai and Shenzhen stock exchanges made a joint higher bid of 22 taka per share, or $122 million, and offered additional technical support worth nearly $37 million.
The China Factor in Indo-Bangladesh ties
- The intervention by the Bangladesh Securities and Exchange Commission in the sale sparked allegations in local media that it was trying to favour India.
- The competing bids have exposed tensions in Bangladesh as it juggles growing interest from China against long-standing ties with its huge neighbour India.
- In recent years, India has made big investments in Bangladesh and Indian companies have won multi-billion contracts in key sectors
- But increasingly it must counter China, which has also courted India’s arch-rival Pakistan and strategic Indian Ocean nations including Sri Lanka and the Maldives.
