The government’s plan of raising USD 1 billion by issuing bonds of power companies on the stock market of Singapore has remained in paper for the last one year. In March last year, the power, energy and mineral resources ministry had planned its entry into the global stock market to not only enhance the transparency and accountability of the power companies, but also to create a ‘branding’ of Bangladesh in the outside world.
The ministry had also brought in consultants from a world-renowned firm to assist it with the listing process on the Singapore stock market. But since then, no progress has been made, this correspondent has found out.
However, Nasrul Hamid, state minister for power, energy and mineral resources, said that it is not true that no progress has been made. “We have already found out a proper consultant to start the process,” he said.
Refusing to disclose the name, the state minister said that before listing its companies on a global exchange, the government has to consider a lot of things. “We have to be absolutely ready before listing our power companies on a global exchange,” he added.
When asked why the foreign investor would be interested in buying the bonds of Bangladeshi power companies as progress in some of the ongoing mega power projects was very slow, Hamid replied, “If we want to go to a global market, we need to disclose all the information. The more transparent we become, the less the corruption will be. The companies will have to be transparent about disclosing their information to attract information. Also, in that way, it will increase their efficiency and accountability, and, when the companies increase those, the investor will be interested.”
The state minister said that Bangladesh now has a better rating than the other countries. “I think it is our best chance to enter the global market. We can brand our market as a secure market for investment,” he said.
“For long, we have been very traditional. Now we need to think out of the box,” he added.
“If we think out of the box, we can even create a financial product out of our bill collection. The two companies, DPDC and Desco, collect Tk. 1,000 crore per month. If they can turn that money into a product and invest it in the stock market, it could increase their capital immensely," he said.
“BPDB has an asset value of not less than Tk. 20,000 crore. Just imagine how much capital could be raised if they go out on the market,” he pointed out.
“Our problem is that we cannot think out of the box. Also, we don’t have the right people in the right places. If you put a person specialising in audit into business development, he/she will never think of expanding the business,” he quipped.
Talking to The Independent, Dr Ahmed Kaikaus, secretary of the Power Division, said that the ministry will have a meeting on this issue by March. “If we want to have the money from development partners, we have to go through stringent terms and conditions. Also, if we want to have a big investment, I don’t think the bank is a very good solution in the long run,” he added.
“We have to go for alternative financing. We have successfully
implemented Export Credit Agency (ECA) financing. Now, we need to know more about the bond process. This is an Asian market. So, we prefer Singapore because it is close to home and is one of the best in terms of bonds,” he said.
In a mail to The Independent, Farhana Siddiqui, director of Drew & Napier (corporate and finance), a leading law firm of Singapore, said that listing in Singapore is easier than other markets. She said that Singapore would be a good option for Bangladesh as it is within Bangladesh’s geographical proximity and time zone. The problem in being listed with London and New York stock exchanges is the timing and trading hours. In case of Singapore, there is no such problem, she explained.
“Bangladesh and Singapore have a double-tax treaty. And since Bangladeshi companies continue to develop along international standards, Singapore seems to make the most sense for them to launch their international growth stories,” she wrote.