'We have received the SEC nod to float the fund and will start buying shares from Thursday,' Investment Corporation of Bangladesh managing director Md Fayekuzzaman told New Age.
The capital market regulator also granted the request of the ICB, prime sponsor of the fund, for permission to float on the market immediately whatever amount of the sponsors' investment it has in its hand at the moment.
'The ICB sought approval for floating immediately the amount of sponsors' investment it has in its hand and we have granted it, considering the nature and purpose of the fund,' said SEC member Yasin Ali.
The Bangladesh Fund will begin its journey by floating initially Tk 500 crore, the amount of sponsors' investment accumulated so far. The other seven sponsors of the fund committed to contribute Tk 1,000 crore in the fund but had not come up with the money till Wednesday.
The remaining Tk 3,500 crore will be collected from institutional and individual investors by selling units of the fund.
'We will now ask the institutional investors to join the fund. A number of these private institutions have already expressed their interest to do that,' Fayekuzzaman told New Age.
He said, 'If we consider the nature of the fund, I will say it will be more profitable for investors who will join earlier.'
'The price of the units will be determined based on their net asset value and, if the fund makes profit, the unit price will rise,' he explained.
The units of Bangladesh Fund will be traded on over-the-counter market across the country.
'To begin with, only the state-owned banks will be authorised to deal in the Bangladesh Fund units. After observing the progress for a while, we may allow private banks to deal in the units as well,' the ICB chief executive said.
He said the fund would purchase shares having sound fundamentals, like a lower price-earning ratio.
An ICB source said, as on Tuesday, Jiban Bima Corporation was yet to specify its investment amount. He also said that most of the other sponsors had no share in the initial amount of Tk 500 crore.
'Jiban Bima is yet to confirm the amount of its contribution to the fund. We also could not collect contribution from all the sponsors to the Tk 500 crore initial portion,' he added.
The ICB and seven other state-run financial institutions on March 6 declared creation of the mutual fund aimed at stabilising the volatile equities market. The total sponsors' investment in the fund is envisaged to be Tk 1,500 crore and the remaining Tk 3,500 crore will be floated for public subscription at a face value of Tk 100 per unit.
Source: New Age
