The Bangladesh Fund, a Tk 5,000-crore stock market stabilisation fund announced by the government in 2011 to rescue the small-scale investors, could manage
only Tk 1,605 crore after two years of its launching.
The Investment Corporation of Bangladesh, a state-owned enterprise,
after the market crash in 2010 declared to form the open-ended mutual
fund of Tk 5,000 crore to restore stability in the capital market.
The ICB as the prime sponsor of the fund initially decided to invest Tk 500 crore in the fund and co-sponsors Sonali Bank Tk 200 crore, Janata Bank Tk 200 crore, Rupali Bank Tk 100 crore, Bangladesh Development Bank Tk 100 crore and Shadharan Bima Corporation Tk 100 crore.
But, Shadharan Bima Corporation, after giving only Tk 10 crore to the fund, denied investing more in it.
The fund in May, 2011 started its operation after getting approval from the BSEC.
The sponsors of the fund then had said that fund was formed to rescue the market and to restore stability in the market.
They also said that the fund would be profitable for the investors.
The old benchmark general index of the Dhaka Stock Exchange, DGEN, lost 26.79 per cent or 1,605.62 points from May 1, 2011 to June 30, 2013.
The DGEN, which was 5,991.38 points on May 2, 2011, declined to 4,385.76 points on June 30, 2013.
The DGEN plummeted to a five-year low at 3,617.35 points on April 29, 2013. The index stood at 3,383.23 points on November 11, 2009. It had soared to its highest-ever level of 8,918.51 points on December 5, 2010.
Market operators said the Bangladesh Fund failed to collect Tk 5,000 crore as it failed to boost the market and to offer any dividend to its investors.
ICB Asset Management Company Limited, a subsidiary of the ICB, is operating the fund.
According to the last disclosed net asset value of the fund on June 30, it stood at Tk 98.62 against its issue price of Tk 100 a unit.
The market price of the Bangladesh Fund stood at Tk 1,583.60 crore against its cost price of Tk 1,766.20 crore. The gap between the cost price and the market price is Tk 183 crore against the actual investment of Tk 1,605 crore as on June 26.
Asked about the impact of the Bangladesh Fund on the capital market, Fayekuzzaman said along with other mutual funds of the ICB and Bangladesh Fund they tried their best to support the market.
‘This might have saved the market from further fall.’
He said, ‘The ICB has to play a duel role in the market which is very difficult. It has to ensure dividend for its unit holders and has to support the market.’
About the fund size Fayakuzzaman said due to the dull market they had to concentrate on stabilising the market rather on profit-making. ‘So, we are failing to collect expected amount of fund for the Bangladesh Fund.’
‘But, in recent time we have recovered significantly. If we can offer some dividend to its unit holders, we will be able to attract investors to invest in the fund which will push the fund size up,’ he said.
-With New Age input
