MF sector soars to the top on DSE, with five on gainers' chart

The mutual fund (MF) sector experienced the highest price appreciation among all the sectors on the Dhaka Stock Exchange (DSE) last week, driven by increased investor participation.
The listed closed-end MFs also dominated the weekly gainers' chart, with five, out of the top 10 gainers, being MFs that witnessed price increases ranging between 10 and 30 per cent.
The five top MFs are ICB AMCL CMSF Golden Jubilee Mutual Fund, Prime Finance First Mutual Fund, Asian Tiger Sandhani Life Growth Fund, NCCBL Mutual Fund-1, and Reliance One, the first scheme of Reliance Insurance Mutual Fund. Of them, ICB Golden Jubilee Mutual Fund was the number one gainer, with an appreciation of 30 per cent.
At the end of the week, the market capitalisation of the MF sector surpassed that of other listed securities, with a rise of 2.5 per cent as against 0.4 per cent in the previous week.

Market experts, however, are puzzled by the surge in prices as the net asset value (NAV) of MFs remained stagnant due to the lack of price movement in the securities held in the funds' portfolios.
The investors' participation in the listed MFs jumped 153 per cent last week, compared to the previous week, resulting in a weekly turnover of Tk 444.4 million in the five sessions, a significant increase from Tk 175.8 million observed in the previous week.
Md Ashequr Rahman, Managing Director of Midway Securities, said MFs have seen no price movement for a long time. Now, the sudden price movements suggest a lack of professional conduct among a section of investors, he pointed out.
He highlighted a recent statement from the securities regulator that asset management companies (AMCs) having no MFs would face regulatory actions over their failure to start operations with a stipulated time frame.
So, some might have speculated that this regulatory decision would lead to better performance of the existing MFs, he added.
But there is no relation between the existing MFs and the AMCs which are yet to float any MFs, Mr Rahman said. "So, taking position in MFs based on speculation is an unprofessional behaviour of investors."
Despite availing quota facilities in the IPOs (initial public offering), some 15 AMCs have yet to launch any MFs. The regulator has warned that these AMCs will lose licence if they do not initiate operations for at least one MF or a collective scheme within three years of registration or within a year from the issuance of the directive, whichever comes later.
According to DSE data, significant price movements in the mutual funds were observed on Wednesday, with all MFs witnessing increased investor participation.
On the day, a total of 11 listed MFs came out of the floor prices, contributing to a sector turnover of Tk 933.5 million on the DSE.
Insiders believe this turnover may be the highest in the last two or three years.
At the end of the week, a total of 14 listed MFs closed above their floor price while the rest 23 remained at the floor price. Their prices were also below the face value of Tk 10.
According to the BSEC, as many as 64 licences have so far been issued to asset management companies.
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