Listed mutual funds (MFs) witnessed the highest return last week on the Dhaka bourse among all sectors, with investors' sudden interest in them.
The sectoral return of close-ended MFs was 5.14 per cent in the week, followed by the ceramics and services & real estate sectors.
Of the weekly top 10 gainers among securities, four were MFs. The funds are DBH First MF, Prime Finance First MF, AB Bank 1st MF, and EBL 1st MF. The pooled funds experienced appreciation of 17.86 per cent to 23.08 per cent in the five sessions executed last week on the Dhaka Stock Exchange (DSE).
The recent regulatory moves to reform the scam-hit industry might have engendered optimism among investors, said market experts.
In line with the recommendation of the task force assigned to propose reforms to the market, the securities regulator recently went ahead with the liquidation of a fund, having rejected a time extension plea.
Asian Tiger Sandhani Life Growth Fund is undergoing liquidation since early March following the completion of its tenure of 10 years.
"The liquidation of the fund might have created some optimism among many investors," said Mahmudur Rahman Razu, first assistant vice-president (wealth management) of Prime Bank.
The previous extensions of tenures of close-ended MFs after maturity were the key reason behind the dire strait of the industry.
The task force also suggested that fund managers should not invest in risky non-listed companies.
However, despite the significant price rise, DBH First MF, AB Bank 1st MF, and EBL 1st MF closed below the face value of Tk 10 each unit last Thursday.
In fact, a majority of the listed MFs traded at discounted prices last week due to the industry's poor performance for more than a decade.
Financial frauds committed by asset managers have made investors skeptical about professionally-managed funds. There are also doubts about the quality of underlying assets in the portfolios of fund managers.
Mr Razu, of Prime Bank, said the MFs had almost hit the bottom.
Of the 37 listed MFs, 34 are being traded below the face value while the market prices of many funds are even less than Tk 5 each unit.
In such a situation, the number of sellers has declined. Moreover, the securities regulator said it would not extend the tenures of the close-ended MFs.
That may enhance the possibility of some gains by purchasing heavily-discounted MF units with the maturity time approaching.
During the week that ended on March 6, the listed MFs posted a turnover of Tk 90 million on the DSE and in the following week the turnover jumped to Tk 426 million.
The sector experienced a turnover of Tk 799 million last week. As many as 25 out 37 funds saw appreciation on Wednesday on the premier bourse.
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