 | Tk 5,000cr fund to boost stocks
07 March, 2011
The state-run investment organisation and seven other state-owned enterprises have come forward to give a massive liquidity support to the shrivelling stockmarket by creating a Tk 5,000 crore fund.
The eight SoEs are the sponsors of the fund styled "Bangladesh Fund", which will be an open-ended mutual fund, and the decision of floating the fund was finalised at a meeting in Dhaka yesterday.
Half of the fund will be utilised in buying shares from the secondary market, while the rest will be kept for the money market, said Md Fayekuzzaman, managing director of Investment Corporation of Bangladesh (ICB) and also the organiser and manager of the fund.
"Bangladesh Fund will be an open-ended mutual fund and it will also help boost the investors' confidence," he said after the meeting.
"As it's an open-ended fund, the door for any financial institute would remain open for their participation in the fund," he said.
An open-ended mutual fund is a professionally managed collective investment scheme that has unlimited lifetime and size. The fund manager pools money from many sponsors or investors through its selling agents and invests it in stocks, bonds and short-term money market instruments, and pays out dividends to the unit holders annually.
Apart from the ICB, the seven other SoEs are: Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Bangladesh Development Bank, Sadharan Bima Corporation and Jibon Bima Corporation.
The sponsors, however, will decide the sizes of their participatory portions in the fund later.
Fayekuzzaman said the ICB will apply for the regulatory approval required after the eight participating institutions come up with permissions from their respective boards of directors.
Release link:http://www.thedailystar.net/newDesign/news-details.php?nid=176661
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