By IANS,
Dhaka : The Bangladesh Fund, an open-ended mutual fund worth $682.5 million, came into operation Thursday with regulator Securities and Exchange Commission (SEC) approving its registered trust deed and certifying its floating.
“We have received the SEC nod to float the fund and will start buying shares from Thursday,” said Investment Corporation of Bangladesh Managing Director Mohammed Fayekuzzaman.
The capital market regulator also granted the request of the Investment Corporation of Bangladesh (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 the amount of sponsors’ investment accumulated so far.
“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.
“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.”
The units of Bangladesh Fund will be traded on over-the-counter markets across the country.
The ICB and seven other state-run financial institutions March 6 declared creation of the mutual fund aimed at stabilising the volatile equities market that has witnessed several crashes in the recent months.