Bangladesh Fund yet to receive significant public subscription

Bangladesh Fund, a special Purpose Open-end Growth Fund launched with an initial size of Tk 50 billion, observed insignificant public subscription over the last three years due mainly to legal complexities faced by NRBs.
Bangladesh Fund was floated by state-run Investment Corporation of Bangladesh (ICB) mainly to support the market bruised due to the stock market debacle in January (2010)-December (2011).
"Non-Resident Investors Taka Account (NITA) was opened along with appointing agent abroad to fulfill the target of public portion. But the target was not fulfilled due to some legal complexities," a market insider said.
Out of the fund's total initial size worth Tk 50 billion, the sponsors contributed Tk 15 billion and the remaining fund worth Tk 35 billion was supposed to be collected from public.
The fund's public subscription started on October 10, 2011 and as per latest information, the amount of public subscription of Bangladesh Fund stood at around Tk 1.9 billion only.
Initially, the fund launched its operation with the sponsor portion.
The officials of ICB Asset Management Company Limited (ICBAMCL), however, said public subscription of the fund varies time to time as a portion of unit holders surrenders their units.
"Positive thing is that the rate of purchasing units is greater than the rate of surrendering units," said a senior official of the ICBAMCL on the condition of anonymity.
He said due to different obstacles the fund's public portion was not fulfilled.  
He said public subscription worth Tk 1.9 billion is not insignificant considering the poor market situation continued for last three years.
"In 2012 the country's capital market got a good support from Bangladesh Fund," the official of the ICBAMCL added.
Dr. AB Mirza Azizul Islam, the former chairman of the securities regulator, said the intention of floating Bangladesh Fund was to support the capital market.
"The fund manager can say better about insufficient public subscription of Bangladesh Fund. But the support of the fund was not visible in the capital market," said Mr. Islam, also former advisor to the caretaker government.  
Bangladesh Fund issued 5.0 per cent and 10 per cent cash dividend in 2013 and 2014 respectively.
The ICBAMCL officials said they are expecting to recommend good dividends in 2015.
The fund collected Tk 15.0 billion from eight sponsors which are ICB, Sonali Bank, Janata Bank, Agrani Bank, Bangladesh Development Bank Limited (BDBL), Rupali Bank, Sadharan Bima Corporation and Jiban Bima Corporation.
According to the Annual Report, Bangladesh Fund earned a total of above Tk 2.27 billion by way of dividend, interest, capital gains and premium on sales of units during the FY 2013-14. Fund's income was above Tk 1.85 billion during the FY 2012-13.
After deducting expenditure and provisions, the fund's net income was above Tk 1.84 billion in FY 2013-14.
Bangladesh Fund' earning per unit for the FY 2013-14 stood at Tk 10.06 which was Tk 7.89 in previous FY.
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