Bangladesh Fund plans investment of Tk 15b in capital market
Sunday, 10 April 2011
Asaduzzaman Pallab
An amount of Tk 15 billion out of Bangladesh Fund will be invested in the capital market as soon as the Securities and Exchange Commission (SEC) accords approval to this effect. The total size of the BF is 50 billion. The sponsor of the BF has contributed Tk 15 billion which will be invested in share market. Investment Corporation of Bangladesh (ICB) is the major sponsor of the BF. Seven other government owned financial institutions are the co-sponsor of this biggest ever mutual fund. Usually, any mutual fund invests money in the capital market after getting approval from the regulatory body and after completing the process of public and institutional subscription. At present capital market regulator Securities and Exchange Commission (SEC) is considering granting approval to the Tk 50 billion Bangladesh Fund. When contacted, Managing Director of ICB Fayekuzzaman told FE that as BF is an open end mutual fund there is no problem to start investment in the capital market with the sponsor's portion of money. We are considering making investment as early as possible for the sake of market stability. He informed that after getting the approval from the SEC, ICB will invite the private sector banks, insurance companies and other private financial institutions to participate in the proposed BF. ICB will also start the process of inviting the general investors to participate in the proposed BF after getting approval from the SEC. So far BF has managed to collect Tk 15 billion from various sponsors. Of them, major sponsor of the BF, Investment Corporation of Bangladesh (ICB) has contributed Tk 5 billion in the fund. Sonali Bank Limited, Janata Bank Limited and Agrani Bank Limited each contributed Tk 2 billion, Sadharan Bima Corporation and Rupali Bank Limited will contribute Tk 3 billion and Jiban Bima corporation Tk 1 billion. Meanwhile a source in the SEC said it will take some time to give final approval to the BF as the main sponsor has sought some incentives for the fund. The manager of the BF has sought various benefits including tax exemption, 5 per cent quota in the upcoming Initial Public Offerings (IPO) and 30 per cent of the shares of the state-owned enterprises, which would offload their stakes in the market, at face value. Moreover, ICB has sought permission to allow undisclosed money to be invested in the BF. MD of ICB Fayekuzzaman said, as we have asked for some incentives for the BF, there might be a lot of issues for scrutiny. We are providing all sorts of information to the regulatory body to get the approval for BF as soon as possible. Earlier SEC committed to give quick approval to the BF. Securities regulator hopes to okay the mega fund "in the shortest possible time" -- a move seen as key to boost the country's volatile stock market.
An amount of Tk 15 billion out of Bangladesh Fund will be invested in the capital market as soon as the Securities and Exchange Commission (SEC) accords approval to this effect. The total size of the BF is 50 billion. The sponsor of the BF has contributed Tk 15 billion which will be invested in share market. Investment Corporation of Bangladesh (ICB) is the major sponsor of the BF. Seven other government owned financial institutions are the co-sponsor of this biggest ever mutual fund. Usually, any mutual fund invests money in the capital market after getting approval from the regulatory body and after completing the process of public and institutional subscription. At present capital market regulator Securities and Exchange Commission (SEC) is considering granting approval to the Tk 50 billion Bangladesh Fund. When contacted, Managing Director of ICB Fayekuzzaman told FE that as BF is an open end mutual fund there is no problem to start investment in the capital market with the sponsor's portion of money. We are considering making investment as early as possible for the sake of market stability. He informed that after getting the approval from the SEC, ICB will invite the private sector banks, insurance companies and other private financial institutions to participate in the proposed BF. ICB will also start the process of inviting the general investors to participate in the proposed BF after getting approval from the SEC. So far BF has managed to collect Tk 15 billion from various sponsors. Of them, major sponsor of the BF, Investment Corporation of Bangladesh (ICB) has contributed Tk 5 billion in the fund. Sonali Bank Limited, Janata Bank Limited and Agrani Bank Limited each contributed Tk 2 billion, Sadharan Bima Corporation and Rupali Bank Limited will contribute Tk 3 billion and Jiban Bima corporation Tk 1 billion. Meanwhile a source in the SEC said it will take some time to give final approval to the BF as the main sponsor has sought some incentives for the fund. The manager of the BF has sought various benefits including tax exemption, 5 per cent quota in the upcoming Initial Public Offerings (IPO) and 30 per cent of the shares of the state-owned enterprises, which would offload their stakes in the market, at face value. Moreover, ICB has sought permission to allow undisclosed money to be invested in the BF. MD of ICB Fayekuzzaman said, as we have asked for some incentives for the BF, there might be a lot of issues for scrutiny. We are providing all sorts of information to the regulatory body to get the approval for BF as soon as possible. Earlier SEC committed to give quick approval to the BF. Securities regulator hopes to okay the mega fund "in the shortest possible time" -- a move seen as key to boost the country's volatile stock market.