Business Desk :
China has made its way into the financial ecosystem of some of the closest neighbours of India. It has emerged that China has become a significant player in the stock exchanges of both Pakistan and Bangladesh – two countries with whom India does not share a very cordial relationship – by acquiring a significant stake in the leading bourses of the two countries.
In terms of the size of the stock markets though, India dwarfs both Pakistan and Bangladesh by miles. While India boasts of a market capitalisation of nearly $4.5 trillion ($4,500 billion), the valuation of Pakistan and Bangladesh markets are $44 billion and $5.72 billion, respectively.
In March 2017, a consortium comprising of entities from China and Pakistan acquired a 40 percent stake in Pakistan Stock Exchange. This is corroborated by the disclosures made on the Shanghai Stock Exchange website.
“In March 2017, the Shanghai Stock Exchange (SSE), China Financial Futures Exchanges (CFFEX), Shenzhen Stock Exchange (SZSE), Pak China Investment Company Limited, and Habib Bank Limited formed a consortium and acquired 40 per cent stake in Pakistan Stock Exchange,” says a statement on the website of the Shanghai Stock Exchange.
Further, the latest annual report of Pakistan Stock Exchange shows that there are 10 directors on the board of the bourse and three – You Hang, Fu Hao, and Gu Junmei — are Chinese.
While Hang is a representative of China Financial Futures Exchange (CFFEX), the other two are senior officials of Shanghai Stock Exchange.
Further, the 2024 annual report of Pakistan Stock Exchange mentions Shanghai Stock Exchange (SSE), China Financial Futures Exchanges (CFFEX) and Shenzhen Stock Exchange (SZSE) as “foreign shareholders” of the bourse.
While Pakistan Stock Exchange was incorporated in the year 1949 under the name Karachi Stock Exchange (Guarantee) Limited, it was corporatised and demutualised in 2012 and renamed as Karachi Stock Exchange Limited.
Thereafter, in the year 2015-16, Karachi Stock Exchange, Lahore Stock, Exchange and Islamabad Stock Exchange were integrated to form a single national entity, Pakistan Stock Exchange Limited, as per the latest annual report of the bourse.
As mentioned earlier, Pakistan is not the only South Asian country where China has marked its presence in the financial ecosystem. There is Bangladesh as well.
A year after acquiring a stake in Pakistan Stock Exchange, a Chinese consortium formed by the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) acquired 25 percent stake in Dhaka Stock Exchange.
“In May 2018, the Bangladesh Securities and Exchange Commission officially approved the bidding scheme of the Chinese consortium formed by the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE),” shows a statement on Shanghai Stock Exchange website.
But unlike in the case of Pakistan Stock Exchange, China does not have a significant presence in the board of Dhaka Stock Exchange. According to the website of Dhaka Stock Exchange, there is only one Chinese representation among 13 board members.
Wang Hai of Shenzen Stock Exchange sits on the board of Dhaka Stock Exchange.
(Ashish Rukhaiyar, moneycontrol.com)
