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BSEC yet to finalise amendment to mutual fund rules

FE Report | December 14, 2017 00:00:00

The market prices of most of the listed mutual funds (MFs) are yet to cross their face value due to various reasons including investors' shaky confidence.

For a long time, the units of the listed MFs are being traded below their face value of Tk 10 each.

The Bangladesh Securities and Exchange Commission (BSEC) is yet to finalise the proposed amendment to the rules of MFs it had approved long back for bringing discipline in managing the MFs.

The regulator had approved some new provisions for the amendment at a meeting held on December 7, 2015.

But the BSEC is yet to take public opinion to finalise the amendment to the rules of MFs.

The market experts said due to the nature of the capital market, investment culture is not built here.

"The market price of MFs can go below their net asset value (NAV). But it is abnormal if the units of MFs are traded below face value," said Yarwer Sayeed, managing director of AIMS of Bangladesh.

He said while making investment investors consider the speculative market behaviour.

"Presently, there is no charm in MFs except the poor dividend recommended once in a year. The performance of many fund managers is also not up to the mark," Sayeed said.

He said investment culture is required to restore investors' confidence to MFs.

"The declining market trend is also a reason behind investors' less participation in MFs," Sayeed added.

According to information of Dhaka Stock Exchange (DSE), a total of 36 closed-end MFs are listed with the stock exchanges and 28 MFs are being traded below their face value of Tk 10 each.

The MFs whose units presently are being traded below face value are: First Janata Bank MF, AB Bank 1st MF, AIBL 1st Islamic MF, CAPM BDBL MF 01, DBH First MF, EBL First MF, EBL NRB MF, EXIM Bank 1st MF, First Bangledesh Fixed Income Fund, Green Delta MF, ICB AMCL Third NRB MF, ICB AMCL First Agrani Bank MF, ICB AMCL Second MF and ICB Employees Provident MF1 : Scheme 1.

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