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Sunday, April 5, 2009

Mutual funds worth Tk 320cr in the offing

Five mutual funds worth around Tk 320 crore are awaiting the approval of the Securities and Exchange Commission for raising funds through initial public offerings.
Among them, BGIC Mutual Fund, IDLC 1st Mutual Fund and Agrani Mutual Fund will offer around Tk 50 crore each when the size of the Green Delta Mutual Fund will be around Tk 70 crore, said Yawer Sayeed, managing director of Aims of Bangladesh, the asset manager of the issues.
Also he said EBL Mutual Fund, sponsored by Eastern Bank, would offer Tk 100 crore. RAC Management Company Private Limited is managing the issue, he added.
EBL Mutual Fund has recently submitted preliminary application to the SEC seeking its approval, while the four other mutual funds are in different phases of the approval process, said Aims’ MD.
Referring to the four mutual funds managed by Aims of Bangladesh, Yawer said, ‘Sizes of the funds may be increased at the time of final approval.’
Meanwhile, Trust Bank, IFIC Bank, Mercantile Bank and Popular Life Insurance Company announced that they would also float mutual funds.
As per a board decision of Trust Bank, the bank will sponsor a mutual fund named ‘Trust Bank 1st Mutual Fund’ of Tk 200 crore, wherein bank’s stake as sponsor will be Tk 40 crore subject to the approval of the SEC, said sources in the Dhaka Stock Exchange.
IFIC Bank’s board decided to sponsor a mutual fund titled ‘IFIC Bank 1st Mutual Fund’ of Tk 100 crore, wherein bank’s stake as sponsor would be Tk 25 crore and Mercantile Bank’s board resolved to sponsor a mutual fund named ‘MBL 1st Mutual Fund’ worth Tk 100 crore, wherein bank’s stake as sponsor would be Tk 20 crore.
Popular Life Insurance’s board decided to sponsor a mutual fund named ‘Popular Life Mutual Fund’.
‘More mutual funds will widen the doors for retail investors to put more money in stocks under institutional frame,’ said Salahuddin Ahmed Khan, who teaches finance at Dhaka University.
‘Floating of mutual funds will raise supply of securities to the market,’ he said. ‘But, sponsors’ portions in the funds and pre-IPO placements should be filled first before raising funds from public, so that investors could have a clear understanding of the portfolio of a particular mutual fund,’ he suggested.
Salahuddin, also a former chief executive officer of the DSE, said that SEC should pursue a pragmatic method in brining more mutual funds in the market keeping in mind demand-supply situation of the market in a particular time.
The DSE and the Chittagong Stock Exchange at a meeting on March 31 decided that they would discourage listing of companies under Tk 30 crore paid-up capital and mutual fund under Tk 100 crore for the interest of the investors. In a post-meeting press briefing, the bourses’ leaders argued that gamblers feel easier to target low capitalised stocks in manipulating market.
Presently, a total of 17 mutual funds are listed with the stock exchanges. Of them, state-owned Investment Corporation of Bangladesh and its subsidiaries have floated 12 mutual funds while Grameen Bank has two mutual funds and state-run BSRS and private sector companies Aims and Prime Finance and Investment have one such fund each.

The New Age



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