Mutual fund shares begin to bounce back
Sunday, 7 November 2010
Raihan M Chowdhury
The share prices of Z-category companies recorded an abnormal rise in the stock market in recent months though the prices of mutual funds, reckoned as one of the most dynamic and innovative investment vehicles for small and risk-averse investors remained undervalued for a long eight months.
Analysts and market observers opined that it was not at all a good sign that prices of worst-category shares mark an unabated rise in a 52-week period ignoring fundamentally good shares of other sectors including mutual fund.
Share prices of Z-category companies like Chittagong Vegetables, Safko Spinning, Anwar Galvanising, Aziz Pipes, Bd Autocars, Provati Insurance, Tallu Spinning and Bangladesh Shipping Corporation jumped to a record high in the recent months in the Dhaka Stock Exchange (DSE).
The prices of Chittagong Vegetables and Safko Spinning in the last 52-week period hovered between the range of Tk 90.75 to Tk 2499.75 and Tk 80 to Tk 599 respectively against the face value of Tk 100 per share.
"Why a section of investors put their money in Chittagong Vegetables which incurred losses consecutively since 2000," a market observer told the FE expressing his utter surprise on its abnormal rise of share price.
Prices of other Z-category companies like Anwar Galvanising, Aziz Pipes, Bd Autocars, Provati Insurance, Tallu Spinning, Safko Spinning, Meghna Pet, Legacy Footwear and Bangladesh Shipping Corporation similarly recorded an abnormal rise.
Per share of Anwar Galvanising jumped between the range of Tk 280 to Tk 609, Aziz Pipes Tk 391 to 699, Bd Autocars Tk 260 to Tk 655, Provati Insurance Tk 421 to Tk 720, Tallu Spinning Tk 135 to Tk 620, Meghna Pet Tk 14 to Tk 30, Legacy Footwear Tk 31 to Tk 66 and Bangladesh Shipping Corporation Tk 2980 to Tk 5899 in the last 52-week.
Mutual Funds play a very important role in the development of the capital market. The maturity of the market is also at times gauged on the share of collective investment schemes in the market capitalization.
Globally mutual funds are investment of choice for retail as well as institutions due to its inherent benefit of diversification and active professional management.
Mutual funds have a history of providing market stability and facilitating institutionalization of capital markets.
On the other hand, mutual fund shares, however started to bounce back Thursday last when the Securities and Exchange Commission (SEC) allowed AIMS First Guaranteed Mutual Fund to disburse its pending dividends to the shareholders.
According to CSE sector-wise index, the price barometer of mutual funds gained 599.78 points in a single day Thursday last.
The Mutual Fund index of the Chittagong bourse moved to 9346.53 points against 8746.75 on that day.
The country has now 28 mutual funds with an issued capital of Tk 16,066 million.
Besides, a good number of mutual funds are in the pipeline.
The share prices of Z-category companies recorded an abnormal rise in the stock market in recent months though the prices of mutual funds, reckoned as one of the most dynamic and innovative investment vehicles for small and risk-averse investors remained undervalued for a long eight months.
Analysts and market observers opined that it was not at all a good sign that prices of worst-category shares mark an unabated rise in a 52-week period ignoring fundamentally good shares of other sectors including mutual fund.
Share prices of Z-category companies like Chittagong Vegetables, Safko Spinning, Anwar Galvanising, Aziz Pipes, Bd Autocars, Provati Insurance, Tallu Spinning and Bangladesh Shipping Corporation jumped to a record high in the recent months in the Dhaka Stock Exchange (DSE).
The prices of Chittagong Vegetables and Safko Spinning in the last 52-week period hovered between the range of Tk 90.75 to Tk 2499.75 and Tk 80 to Tk 599 respectively against the face value of Tk 100 per share.
"Why a section of investors put their money in Chittagong Vegetables which incurred losses consecutively since 2000," a market observer told the FE expressing his utter surprise on its abnormal rise of share price.
Prices of other Z-category companies like Anwar Galvanising, Aziz Pipes, Bd Autocars, Provati Insurance, Tallu Spinning, Safko Spinning, Meghna Pet, Legacy Footwear and Bangladesh Shipping Corporation similarly recorded an abnormal rise.
Per share of Anwar Galvanising jumped between the range of Tk 280 to Tk 609, Aziz Pipes Tk 391 to 699, Bd Autocars Tk 260 to Tk 655, Provati Insurance Tk 421 to Tk 720, Tallu Spinning Tk 135 to Tk 620, Meghna Pet Tk 14 to Tk 30, Legacy Footwear Tk 31 to Tk 66 and Bangladesh Shipping Corporation Tk 2980 to Tk 5899 in the last 52-week.
Mutual Funds play a very important role in the development of the capital market. The maturity of the market is also at times gauged on the share of collective investment schemes in the market capitalization.
Globally mutual funds are investment of choice for retail as well as institutions due to its inherent benefit of diversification and active professional management.
Mutual funds have a history of providing market stability and facilitating institutionalization of capital markets.
On the other hand, mutual fund shares, however started to bounce back Thursday last when the Securities and Exchange Commission (SEC) allowed AIMS First Guaranteed Mutual Fund to disburse its pending dividends to the shareholders.
According to CSE sector-wise index, the price barometer of mutual funds gained 599.78 points in a single day Thursday last.
The Mutual Fund index of the Chittagong bourse moved to 9346.53 points against 8746.75 on that day.
The country has now 28 mutual funds with an issued capital of Tk 16,066 million.
Besides, a good number of mutual funds are in the pipeline.