Bangladesh Fund starts rolling today

Dhaka, May 5: The Bangladesh Fund, a Tk 5,000 crore open-ended mutual fund, comes into operation today as the Securities and Exchange Commission on Wednesday approved its registered trust deed and issued the certificate for its floating.

'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

Dhaka stocks rebound on Bangladesh Fund hope

Dhaka, May 5: Dhaka stocks had a sharp rise on Wednesday as the investors refrained from panic selling as they became optimistic about the market with the Securities and Exchange Commission on the day approving floatation of Tk 5,000 crore Bangladesh Fund for investment in the capital and money markets.

The daily turnover of the bourse, however, hit three and a half months low to Tk 381.44 crore as buyers remained cautious and took a wait-and-see policy to watch the

impact of the fund in the coming days.

The benchmark general index of the Dhaka Stock Exchange, or DGEN, gained 107.38 points or 1.83 percent on the day to close at 5,973.09 points.

'The market rose as the jittery investors stopped panic selling as they hoped that the market would rise once the Bangladesh Fund starts operation on Thursday [today],' said a stock broker.

He said some retail investors bought shares hoping they would gain from the purchase as the prices of many of issues were low, but the institutional investors remained almost inactive as they wanted to witness the impact of the fund.

As a result, turnover fell by Tk 72 crore from the previous day. Wednesday's turnover hit a four-month low as the turnover on January 25 was Tk 206.41 crore.

The market had been in a damp mood for three sessions before Wednesday because of rumours about the uncertainty of Bangladesh Fund and restructuring of SEC. 

Kazi Sabbir Kamal, an investor, said, 'The fund can help to a great extent to support the market as the volume of it is very large. We hope that the initiators of the fund will perform the role they declared.'  

But some investors were still skeptical about the impact of the fund as other issues like restructuring of SEC and the government move on the January's stock market debacle probe report were yet to be settled.

Out of 248 traded issues on the day, 216 advanced while 26 declined and one remained unchanged.  

Market experts observed that the Bangladesh Fund could be a great addition for the capital market in the long run if it is used properly.

Salahuddin Ahmed Khan, a professor of Dhaka University, said, 'If the Bangladesh Fund can perform as it is expected to, it can be helpful for the market.'

Capital market analyst, Akter H Sannamat, said, 'The Bangladesh Fund is welcome but proper utilization of the fund should be ensured to get the expected result from it.'

'  Source: New Age

Another SEC member asked to resign

Dhaka, May 5: The finance ministry on Wednesday asked another member of the Securities and Exchange Commission to resign from the commission.

The Banking Division secretary, Shafiqur Rahman Patwari, asked SEC member Md Anisuzzaman to resign when the latter called on the former at the division on Wednesday morning. Patwari had asked SEC member Yasin Ali to resign on Tuesday.

The ministry asked the two members to resign, but it is yet to take any action against three top officials, including SEC chairman Ziaul Haque Khondoker, against whom the probe committee on January's stock market debacle recommended for taking actions.

Sources in the ministry said although the probe committee did not find any involvement of Yasin and Anisuzzaman in the scam, a section of government high-ups was creating pressure on them to resign immediately.

The finance minister, AMA Muhith, on Saturday told reporters that the government would restructure the whole commission and replace the chairman within two to four days. But the government is yet to appoint a new chairman till Wednesday.

Newly-appointed member of SEC Helaluddin Nizami, meanwhile, took office on Wednesday. Helaluddin, a former professor of accounting at Chittagong University, said, 'I have joined the commission with an aim to protect the interest of the general investors and I hope it can be achieved by stakeholders' combined effort.'

Source: New Age

SEC member Yasin Ali asked to resign

The finance ministry on Tuesday asked a member of the Securities and Exchange Commission, Muhammad Yasin Ali, to resign from the commission within a day or two.

The other SEC member Anisuzzaman would also be asked to resign while he will meet the banking division secretary, Shafiqur Rahman Patwari, today [Wednesday] at 10am, said sources in the ministry.

The division, however, is yet to take any action against three officials including the chairman of the commission, Ziaul Haque Khandkar, against whom the probe committee on January's stock market debacle, recommended for taking action.

The probe committee found no involvement of Yasin Ali and Anisuzzaman in the share scam.

The finance minister, AMA Muhith, on Saturday announced that the government would restructure the whole commission by appointing a new chairman and members.

The government on Monday appointed Helaluddin Nizami, a professor of accounting at Chittagong University, as a member of the commission.

Sources in the division said a chartered accountant was selected initially for the post of chairman after Muhith declared that the chairman would also be changed, but some quarters raised allegations against him saying he was involved in irregularities during his career at a private non-banking financial institute.

A number of high ups in the government are now lobbying so that Ziaul Haque Khandkar could continue as the chairman of the commission.

The decision on appointing a new chairman would be taken after Muhith returns to the country from Manila where he is attending the annual meeting of the Asian Development Bank.

Source: New Age

MJL Bangladesh makes fresh listing proposal to SEC

The MJL Bangladesh Limited on Tuesday submitted a fresh listing proposal to the Securities and Exchange Commission, mentioning that the company would give 200 per cent cash dividend to its shareholders before listing and compensate from the directors' account of the company if its share prices are traded below the IPO issue price within the six months of listing.  

'We have received a proposal from MJL Bangladesh and we will place it in the next commission's meeting,' an SEC official told New Age.

'The company has proposed that to be listed it will give 200 per cent cash dividend to its IPO shareholders. It has also agreed to compensate upto Tk 10 for each shares from the directors' account if the prices of the IPO shares fall below the issue prices within the six months after listing,' he said.

He said, 'The directors of the company have to deposit in a bank account Tk 40 crore to be used for compensation.'

'We have submitted a fresh proposal to the SEC and we are hopeful that the company will get regulator's nod to be listed this time.' MJL Bangladesh chairman Azam J Chowdhury told New Age.

MJL Bangladesh has been facing a listing deadlock after it went for initial public offering with a share price of Tk 152.40 under the controversial and currently suspended book-building method.

The company was trapped between the regulators' face off over its listing issue. The SEC twice extended listing deadline of the company.

Source: New Age

DSE plunges on panic selling

Dhaka stocks plunged on Tuesday as nervous investors went for heavy sell-offs as uncertainty about the government move to restructure the Securities and Exchange Commission intensified.

Besides, confusion among the investors also deepened over the rumours about possible delay in floating the Tk 5,000 crore Bangladesh Fund and introduction of tax on capital gain, said market operators.

The benchmark general index of Dhaka Stock Exchange, or DGEN, shed 125.67 points, or 2.09 per cent, to close at 5,865.70 points in volatile trading on Tuesday.

After the finance minister made public the probe report on January's stock market debacle and announced that the SEC would be restructured on Saturday, the DGEN lost 184 points in two days.

Turnover of the DSE also dropped by Tk 56 crore to Tk 453.04 crore on Tuesday.

Market operators said the general investors on Tuesday became nervous as a news spread that the appointment of the new SEC chairman would be delayed as the high ups in the government are in a disagreement about recruiting the new SEC chairman, replacing Ziaul Haque Khandakar.

The probe report recommended for ousting Ziaul and the finance minister on Saturday announced that the new SEC chairman would be appointed within two to four days.

'There is a lot of speculation in the market as to who will be the new chairman of the SEC. Besides, there is rumour that Ziaul might continue as SEC chairman as some government high ups want him to stay,' said an official of a brokerage house.

Market operators said the delay over submitting the registered trust deed of Bangladesh Fund by the Investment Corporation of Bangladesh also made the investors pessimistic about the future growth of the market.

Market insiders, however, said that the institutional investors on the day were inactive and some of them went for sell-offs. 

A stock broker said that some investors were also jittery over the rumour that the government would introduce tax on capital gain in the share market and make the use of tax identification number mandatory while opening beneficiary owner's account. 

Out of 248 traded issues, only 30 advanced while 207 declined heavily and 11 remained unchanged on Tuesday.

Salahuddin Ahmed Khan, a finance teacher of Dhaka University, said, 'Today's fall was in continuation of the previous day.'

'As there is a possible government move about restricting its officials of the concerned agencies it may have an impact on the market.'

'Liquidity crunch of the institutions and CPD's [Centre for Policy Dialogue ] recommendations on introducing tax on capital gain and TIN for BO accounts also de-motivated the institutional investors,' he said.

Source: New Age