Prime Bank to float Mutual Fund soon
Monday, 20 April 2009
Kayes M Sohel
A mutual fund worth Tk 1.0 billion, sponsored by Prime Bank Ltd, is expected to be floated soon to help broaden the depth of the market.
The Prime Bank is the latest among the private commercial banks (PCBs) planning to float their own mutual funds.
"The bank will float the close-end mutual fund, titled, the Prime Bank First ICB Mutual Fund, soon subject to approval of the securities regulator," said Sheikh Mortuza Ahmed, head of merchant banking division of the bank.
A closed-end mutual fund has a set number of shares issued to the public through an initial public offering (IPO). These funds have a stipulated maturity period generally ranging from 3 to 15 years.
"Though we are yet to determine share-portions for sponsorship, pre-IPO placement and for general public, maximum shares of the fund will be kept for public subscription," he added.
Floatation of more mutual funds, which are considered risk free investment tools in the stock trading, will create more opportunities for long term investment, Mortuza said.
According to the Dhaka Stock Exchange (DSE) website, the bank will subscribe at least 20 per cent of the fund and the rest will be raised through pre-IPO placement and the IPO. Per unit price of the mutual fund will be Tk 10.
The Asset Management Company Limited AMCL, a subsidiary of the state-owned Investment Corporation of Bangladesh (ICB), will act as fund manager.
A number of commercial banks, including the Eastern Bank Ltd (EBL), the Trust Bank Ltd (TBL) and the IFIC Bank Ltd, have already finalised the process of launching the close-end mutual funds, sources said.
Non-banking financial institutions and nationalised commercial banks are also mulling floatation of mutual funds.
Currently, a total of 17 mutual funds are listed with the bourses. Of them, ICB and its subsidiaries manage 13 mutual funds, AIMS Bangladesh three and BSRS one.
Mutual funds in neighbouring countries of Bangladesh account for more than 40 per cent of the total market capitalisation while in Bangladesh mutual funds contribute only 5.54 per cent of the total market capitalisation.
The combined issued capital of the mutual funds listed with the bourses is worth $ 48 million or Tk 3316 million and their market capitalisation is estimated at $ 250 million or Tk 17219 million.
A mutual fund worth Tk 1.0 billion, sponsored by Prime Bank Ltd, is expected to be floated soon to help broaden the depth of the market.
The Prime Bank is the latest among the private commercial banks (PCBs) planning to float their own mutual funds.
"The bank will float the close-end mutual fund, titled, the Prime Bank First ICB Mutual Fund, soon subject to approval of the securities regulator," said Sheikh Mortuza Ahmed, head of merchant banking division of the bank.
A closed-end mutual fund has a set number of shares issued to the public through an initial public offering (IPO). These funds have a stipulated maturity period generally ranging from 3 to 15 years.
"Though we are yet to determine share-portions for sponsorship, pre-IPO placement and for general public, maximum shares of the fund will be kept for public subscription," he added.
Floatation of more mutual funds, which are considered risk free investment tools in the stock trading, will create more opportunities for long term investment, Mortuza said.
According to the Dhaka Stock Exchange (DSE) website, the bank will subscribe at least 20 per cent of the fund and the rest will be raised through pre-IPO placement and the IPO. Per unit price of the mutual fund will be Tk 10.
The Asset Management Company Limited AMCL, a subsidiary of the state-owned Investment Corporation of Bangladesh (ICB), will act as fund manager.
A number of commercial banks, including the Eastern Bank Ltd (EBL), the Trust Bank Ltd (TBL) and the IFIC Bank Ltd, have already finalised the process of launching the close-end mutual funds, sources said.
Non-banking financial institutions and nationalised commercial banks are also mulling floatation of mutual funds.
Currently, a total of 17 mutual funds are listed with the bourses. Of them, ICB and its subsidiaries manage 13 mutual funds, AIMS Bangladesh three and BSRS one.
Mutual funds in neighbouring countries of Bangladesh account for more than 40 per cent of the total market capitalisation while in Bangladesh mutual funds contribute only 5.54 per cent of the total market capitalisation.
The combined issued capital of the mutual funds listed with the bourses is worth $ 48 million or Tk 3316 million and their market capitalisation is estimated at $ 250 million or Tk 17219 million.