A demo of foreign fund managers' renewed interest in Bangladesh stock market
FE Report | Thursday, 3 July 2008
The Securities and Exchange Commission (SEC) Chairman Faruq Ahmad Siddiqi Tuesday said that launching of LR global Bangladesh Asset Management Company is a testimonial of foreign fund managers' renewed interest in Bangladesh's growing capital market.
"This is a significant event," he said, adding that it shows that foreign investors are showing an increased interest in Bangladesh capital market. "I think this is a demonstration of their growing confidence in the overall growth of Bangladesh."
The SEC chairman made the observations at the launching ceremony of LR global Bangladesh Asset Management Company.
Bangladesh Enterprise Institute President and former secretary of Ministry of Foreign Affairs Farooq Sobhan attended the programme as guest of honour. Former President and CEO of Rockefeller & Company and Principal of LR Global William L. Asmundson, LR global Bangladesh Asset Management Company Director Saiful Islam and Mr Don LaGuardia, Chairman of the company also spoke on the occasion. Held at a city hotel, the opening ceremony was attended by dignitaries of corporate world of Bangladesh.
LR Global Bangladesh Asset Management Company Limited is a subsidiary of US based opportunistic investment firm LR Global which focuses on the developing markets. The company plans launching of a mutual fund worth Tk 1.0 billion this year.
Mr. Don LaGuardia, Chairman of the company said from a modest initial investment we have grown to approximately $440 million, relying heavily on this network of in-country partners and contacts to help identify special opportunities in select Central and Southeast Asian and African markets, of which Bangladesh is among the most promising.
"In fact, we have invested $50 million - more than TK 3.4 billion - in your country over the past 18 months. Furthermore, in 2007 our investments in Bangladesh represented 17 per cent of total foreign turnover on the Dhaka Stock Exchange, as well as a sizeable portion of our fund," LaGuardia said.
Mr. William L. Asmundson, Chairman of LR Global said LR Global is enthusiastic about the long-term prospects of the Bangladesh economy and both its equity and fixed income markets.
"In our view, your economy has the potential to grow at a 6-8 per cent annual rate for at least the next five years as Bangladesh attracts new businesses, including those diversifying production facilities away from China due to environmental concerns, rising inflation and labor shortages," Mr. Asmundson said.
Highlighting the substantial spending on power generation and other infrastructure projects to attract investment in existing as well as new industries, he said the country's capital needs are greater than can be funded locally. Therefore, it is essential that a hospitable environment for foreign direct investment and remittances by Bangladesh citizens living abroad be maintained.
On expanding the privatization program of state-owned enterprises and encouraging privately owned entities to list their shares on the Dhaka Stock Exchange, he said currently, the Dhaka Stock Exchange has a market value of approximately US$12.8 billion, a relatively low 18 per cent of GDP. Moreover, roughly one-half of this value is represented by bank stocks. Excluding the market value of shares that are closely held and not readily tradable would significantly reduce the "free float." Many international investors consider the Bangladesh stock market to be too small to invest in. As the stock market broadens and deepens and the total tradable volume rises, foreign investor interest will increase.
LR Global's current focus in Bangladesh is to identify and invest in undervalued businesses participating in the infrastructure development necessary to achieve its economic growth goals.
Over the past eleven years, LR Global has established a network of strategic alliances in several emerging markets or early-stage frontier markets like Vietnam, Kazakhstan, Azerbaijan, Cambodia and Bangladesh, among others. However, Bangladesh is the first country where we have a physical presence through a local entity, and have been granted an asset management company license.
Saiful Islam, Managing Partner of Equity Partners Limited and Director of LR Global Bangladesh Asset Management Company hoped the newly launched company will become a leading investment resource to manage the growing wealth in Bangladesh.
"With initial funding from LR Global Partners, it is our intention to raise additional capital from local institutional and retail markets-as well as international institutional investors--to float our first mutual fund amounting to Taka 1 billion within the next 4 months," Saiful said.
He said the LR Global also wants to introduce a private equity fund in 2009 as the most effective conduit to help fund the growing number of infrastructure projects. And looking beyond this, we will launch two additional mutual funds by the 3rd quarter of 2010, each with its own unique investment mandate to address specific investor needs.
Founded in 1997 by LR Global Partners and the Rockefeller family, LR Global, currently manages assets worth $449 million.
"This is a significant event," he said, adding that it shows that foreign investors are showing an increased interest in Bangladesh capital market. "I think this is a demonstration of their growing confidence in the overall growth of Bangladesh."
The SEC chairman made the observations at the launching ceremony of LR global Bangladesh Asset Management Company.
Bangladesh Enterprise Institute President and former secretary of Ministry of Foreign Affairs Farooq Sobhan attended the programme as guest of honour. Former President and CEO of Rockefeller & Company and Principal of LR Global William L. Asmundson, LR global Bangladesh Asset Management Company Director Saiful Islam and Mr Don LaGuardia, Chairman of the company also spoke on the occasion. Held at a city hotel, the opening ceremony was attended by dignitaries of corporate world of Bangladesh.
LR Global Bangladesh Asset Management Company Limited is a subsidiary of US based opportunistic investment firm LR Global which focuses on the developing markets. The company plans launching of a mutual fund worth Tk 1.0 billion this year.
Mr. Don LaGuardia, Chairman of the company said from a modest initial investment we have grown to approximately $440 million, relying heavily on this network of in-country partners and contacts to help identify special opportunities in select Central and Southeast Asian and African markets, of which Bangladesh is among the most promising.
"In fact, we have invested $50 million - more than TK 3.4 billion - in your country over the past 18 months. Furthermore, in 2007 our investments in Bangladesh represented 17 per cent of total foreign turnover on the Dhaka Stock Exchange, as well as a sizeable portion of our fund," LaGuardia said.
Mr. William L. Asmundson, Chairman of LR Global said LR Global is enthusiastic about the long-term prospects of the Bangladesh economy and both its equity and fixed income markets.
"In our view, your economy has the potential to grow at a 6-8 per cent annual rate for at least the next five years as Bangladesh attracts new businesses, including those diversifying production facilities away from China due to environmental concerns, rising inflation and labor shortages," Mr. Asmundson said.
Highlighting the substantial spending on power generation and other infrastructure projects to attract investment in existing as well as new industries, he said the country's capital needs are greater than can be funded locally. Therefore, it is essential that a hospitable environment for foreign direct investment and remittances by Bangladesh citizens living abroad be maintained.
On expanding the privatization program of state-owned enterprises and encouraging privately owned entities to list their shares on the Dhaka Stock Exchange, he said currently, the Dhaka Stock Exchange has a market value of approximately US$12.8 billion, a relatively low 18 per cent of GDP. Moreover, roughly one-half of this value is represented by bank stocks. Excluding the market value of shares that are closely held and not readily tradable would significantly reduce the "free float." Many international investors consider the Bangladesh stock market to be too small to invest in. As the stock market broadens and deepens and the total tradable volume rises, foreign investor interest will increase.
LR Global's current focus in Bangladesh is to identify and invest in undervalued businesses participating in the infrastructure development necessary to achieve its economic growth goals.
Over the past eleven years, LR Global has established a network of strategic alliances in several emerging markets or early-stage frontier markets like Vietnam, Kazakhstan, Azerbaijan, Cambodia and Bangladesh, among others. However, Bangladesh is the first country where we have a physical presence through a local entity, and have been granted an asset management company license.
Saiful Islam, Managing Partner of Equity Partners Limited and Director of LR Global Bangladesh Asset Management Company hoped the newly launched company will become a leading investment resource to manage the growing wealth in Bangladesh.
"With initial funding from LR Global Partners, it is our intention to raise additional capital from local institutional and retail markets-as well as international institutional investors--to float our first mutual fund amounting to Taka 1 billion within the next 4 months," Saiful said.
He said the LR Global also wants to introduce a private equity fund in 2009 as the most effective conduit to help fund the growing number of infrastructure projects. And looking beyond this, we will launch two additional mutual funds by the 3rd quarter of 2010, each with its own unique investment mandate to address specific investor needs.
Founded in 1997 by LR Global Partners and the Rockefeller family, LR Global, currently manages assets worth $449 million.