JBC to join 7-member spl fund formed to bail out stock mkt

Jiban Bima Corporation (JBC), a state-owned life insurance company, will join seven other state-owned financial institutions to form a 'special fund' aiming to provide liquidity support following a capital market debacle. These eight financial institutions would sit in a meeting to fix up the size of the proposed special fund on Sunday, it has been learnt. State-owned Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank and three other financial institutions Investment Corporation of Bangladesh (ICB), Bangladesh Development Bank (BDB) and Sadharan Bima Corporation (SBC) took the decision to form a special fund Tuesday to give liquidity support to the country's capital market its current stage. According to competent sources at JBC, apart from the seven institutions, the corporation will also join the Sunday's meeting to find out ways on how to contribute to the special fund. According to the available information, JBC has a huge life fund, a large part of which remains unused. According to the last financial audit report of 2008, total life fund of JBC is Tk 9889.3 million, which has grown substantially in the last two years. Sources said, Sunday's meeting would also determine the guideline for use of the special fund. Initially, the promoters of the fund want to invest in 'good shares', taking money from the special fund. But they did not outline clearly on what basis they will define 'good shares'. The meeting would fix up the criteria for investment in selected shares, they added. When contacted, Fayekuzzaman, Managing Director of ICB, told the FE, "Although there is a lot of rumour about the size of the special fund, we have not yet fixed the size. Only with the consent of the participating institutions, we can fix the size of the fund." Some local media reported that the fund-size of the state-owned institutions would be Tk 100 billion. Fayekuzzaman admitted that along with the seven organisations, JBC would also contribute to the special fund. Market analyst Arif Khan said it is a piece of encouraging news that JBC is joining the special fund, as it has a large amount of money against its life fund. The proposed special fund will be more effective with participation of the big institution. "It will be very important to monitor and coordinate the proper use of the special fund," said Arif Khan, who is also the Managing Director of Zenith Investments Limited, a local asset management company.