JS body for early listing of ICB subsidiaries
Wednesday, 13 January 2010
FE Report
The parliamentary standing committee on finance recommended early listing of the three subsidiaries of Investment Corporation of Bangladesh (ICB).
The subsidiaries are ICB Capital Management Limited, ICB Asset Management Company Limited and ICB Securities Trading Company Limited.
"The performance of the subsidiaries has been satisfactory and they should be listed with the bourses," said the committee chairman AHM Mostafa Kamal after the meeting of the committee on Tuesday.
The capital market is more or less stable and it is growing, he said.
Mr Kamal, however, said Dhaka stocks, the main bourse of the country, made mistake in calculating the index.
He defended the standing committee recommendation on mutual fund (MF) and said price of most of the MFs are well above of their net asset value (NAV).
"All over the world MFs support secondary market and they play a crucial role in time of crisis when the share market plummets," he explained.
Their prices should hover around NAV but in the Bangladesh market it is much higher, he said.
"The regulator should be careful about it. The standing committee recommended redeeming of the close-end MFs and slow approval of new MF," he added.
The standing committee chairman said it is very much logical that a company should float 40 per cent of its paid-up capital on the market though initial public offerings (IPOs).
"If the number of shares is small there is a chance of price manipulation in the market," he said.
The committee also discussed the performance of Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangtha, which have been merged into a new bank - Bangladesh Development Bank Limited (BDBL).
"We discussed why the banks failed in the past and gave some recommendations to the new bank not to repeat the same mistakes," Mr Kamal said.
The main reasons of the failure of the banks are not to provide working capital for borrowers and failed to consider exchange rate fluctuation, he said.
The parliamentary standing committee on finance recommended early listing of the three subsidiaries of Investment Corporation of Bangladesh (ICB).
The subsidiaries are ICB Capital Management Limited, ICB Asset Management Company Limited and ICB Securities Trading Company Limited.
"The performance of the subsidiaries has been satisfactory and they should be listed with the bourses," said the committee chairman AHM Mostafa Kamal after the meeting of the committee on Tuesday.
The capital market is more or less stable and it is growing, he said.
Mr Kamal, however, said Dhaka stocks, the main bourse of the country, made mistake in calculating the index.
He defended the standing committee recommendation on mutual fund (MF) and said price of most of the MFs are well above of their net asset value (NAV).
"All over the world MFs support secondary market and they play a crucial role in time of crisis when the share market plummets," he explained.
Their prices should hover around NAV but in the Bangladesh market it is much higher, he said.
"The regulator should be careful about it. The standing committee recommended redeeming of the close-end MFs and slow approval of new MF," he added.
The standing committee chairman said it is very much logical that a company should float 40 per cent of its paid-up capital on the market though initial public offerings (IPOs).
"If the number of shares is small there is a chance of price manipulation in the market," he said.
The committee also discussed the performance of Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangtha, which have been merged into a new bank - Bangladesh Development Bank Limited (BDBL).
"We discussed why the banks failed in the past and gave some recommendations to the new bank not to repeat the same mistakes," Mr Kamal said.
The main reasons of the failure of the banks are not to provide working capital for borrowers and failed to consider exchange rate fluctuation, he said.