Move to evaluate MF investments on the basis of NAV

The securities regulator has moved to evaluate mutual funds' (MFs') investments made in the units of other MFs on the basis of net asset value (NAV) instead of current market price, officials said.
The regulatory body has initiated the move in an effort to pave the way of giving better dividends by the MFs reducing the amount of their provisioning.
"The units of MFs are being traded much below their NAV. The MFs' investments made in the units of other MFs have squeezed the capacity of giving dividends as well," one BSEC official source said.
Market sources said MFs should be facilitated to give better dividends by evaluating their investments made in the MFs on the basis of their respective NAVs.
"The MFs' market prices have gone down below their respective NAVs. That's why the amount of MFs' provisioning will be reduced if their investments are evaluated on the NAV instead of market price," the BSEC sources said.
They said the regulator is set to discuss the issue at the commission meeting soon.  
Meanwhile, in a circular the Bangladesh Bank (BB) recently has allowed the banks to keep their loan provisioning against the units of MFs considering both the market price and NAV at the current market price.
Earlier, banks used to maintain provisioning against their investments made in the MFs considering only the market price.
The BB officials said the real institutional investors will be benefited after increasing transactions of the MFs in the market following the latest directive.
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