EBL to launch first ever bond fund in country
Monday, 24 May 2010
Kayes M Sohel
The Eastern Bank Limited (EBL), a leading private bank, plans to launch close-end bond fund for the first time in Bangladesh within six months.
The size of the proposed 10-year-tenure bond fund titled 'First Bangladesh Fund' will be Tk 5.0 billion of which sponsors will contribute Tk 2.25 billion.
A bond fund is a collective investment scheme that invests in bonds and other debt securities such as government bonds, municipal bonds, corporate bonds, convertible bonds, mortgage-backed securities and zero-coupon bonds.
Most bond funds pay out dividends more frequently than the individual bonds.
"The EBL has decided to launch such fund with two other sponsors for the first time in Bangladesh," Sayadur Rahman, head of investment banking wing of the EBL, told the FE.
"If everything goes well, it might hit the market within six months," he said adding that launching of the product will depend on securities regulator's approval by the time frame.
The structure of the proposed bond fund would be like mutual funds but its exposure, by nature, will be broader to the debt instruments rather than the stock market, he added.
The Eastern Bank Limited (EBL), a leading private bank, plans to launch close-end bond fund for the first time in Bangladesh within six months.
The size of the proposed 10-year-tenure bond fund titled 'First Bangladesh Fund' will be Tk 5.0 billion of which sponsors will contribute Tk 2.25 billion.
A bond fund is a collective investment scheme that invests in bonds and other debt securities such as government bonds, municipal bonds, corporate bonds, convertible bonds, mortgage-backed securities and zero-coupon bonds.
Most bond funds pay out dividends more frequently than the individual bonds.
"The EBL has decided to launch such fund with two other sponsors for the first time in Bangladesh," Sayadur Rahman, head of investment banking wing of the EBL, told the FE.
"If everything goes well, it might hit the market within six months," he said adding that launching of the product will depend on securities regulator's approval by the time frame.
The structure of the proposed bond fund would be like mutual funds but its exposure, by nature, will be broader to the debt instruments rather than the stock market, he added.