Stocks
Management fees of mutual funds to be fixed based on performance: BSEC
Bangladesh Securities and Exchange Commission (BSEC) is set to introduce a new provision for determining the management fees of mutual funds very soon.
According to the most recent provision, the management fees for managing mutual funds will be determined based on the efficiency and performance of the fund managers or asset management companies.
The process for the introduction of the new provision has almost been completed and it will be published through a gazette notification soon, BSEC Chairman Prof. Shibli Rubayat Ul Islam said while speaking at a roundtable on the capital market on Saturday.
An MF is a financial vehicle that pools assets from shareholders to invest in securities like stocks, bonds, money market instruments, and other assets. It is managed by professional fund managers and its portfolio is structured and maintained to match the investment objectives stated in its prospectus.
The regulatory move to fix management fees based on the performance of the fund managers came in the backdrop of a long-standing demand for the introduction of time-befitting regulations for the MFs.
The poor performance of the fund managers has been blamed for the lack of investor confidence in the mutual funds.
The size of assets under management (AUM) in Bangladesh is very insignificant, compared to India and Pakistan, although the number of asset management companies (AMCs) in Bangladesh is higher than in those two countries.
There are 43 AMCs in India and the size of its AUM is $472 billion while Pakistan has 21 AMCs and the size of its AUM is $6.36 billion as of July 2022.
On the other hand, there are 54 AMCs in Bangladesh and the size of its AUM is $1.60 billion only.
In his speech, BSEC chairman Prof. Shibli Rubayat said the recent growth trend of the MFs is well and they have started disbursing dividends.
“We call the fund managers when they fail to distribute dividends. We ask them for the reasons behind distributing fewer dividends. We also want to know whether the management is weak or not,” he told the roundtable held in a city hotel.
He also said investors having no investment literacy should not invest in mutual funds.
BSEC commissioner said an amendment to the regulations for the mutual funds will bring about a massive change.
“Apart from the management fees, many other changes will be included in the new provision,” said Mr. Rahman, also the chief of the BSEC MF department.
Asked about the insignificant amount of AUM in Bangladesh, he said the situation will improve gradually.
Managing Director of IDLC Investments Md Moniruzzaman said the mutual fund is one of the most popular investment vehicles in developed countries due to investor confidence in such funds and fund managers.
“But Bangladesh is lagging way behind even its neighbor, India, in terms of the size of the mutual fund industry relative to the economy,” he said.
In the USA, the size of the industry is bigger than the economy itself, Moniruzzman said.
Prior, the experts were critical of the regulatory decisions with regard to the extension of the tenures of the closed-end mutual funds and issuance of re-investment units (RIU).
They said the AMCs are benefitted only through RIU as their management fees are increased through the RIU.
The previous commission allowed the AMCs to extend the tenures of the closed-end mutual funds.
The then commission, however, said it took the decision in step with the suggestion of the government.
Currently, there are 36 closed-end mutual funds listed on the stock exchanges.
On the other hand, the number of open-end mutual funds is 84, according to the BSEC data.
Dhaka Stock Market DSE, Bourse on the second working day of the week, 30th September, ended with a negative performance in Indices and a hike in Turnover from the previous working session. This information is known from DSE sources.
503 crore 90 lakh taka shares were traded on this day. 22 crore 58 lakh more tradings were done in DSE today compared to the previous workday, 29th September, Shares worth Tk 481 crores 31 lakh shares were traded last time, Sunday.
The benchmark DSEX lost 33.61 points or 5,624 The Shariah-based index DSES dropped 7.36 point or 1,263 and the blue-chip index DS30 decreased by 9.57 points or 2,053.
Of the issues traded, 72 advanced, 299 declined and 25 remained unchanged.
Shahjibazar Power Company Limited ranked top gainer on DSE, the share price increased by Tk 4.00 paisa or 9.76 percent. On this day, the share was last traded at Tk 45.00 paisa.
Dhaka Electric Supply Company Limited ranked top loser on the DSE, the share price dropped by Tk 1.80 paisa or 7.56 percent. On this day, the share was last traded at Tk 22.00 paisa.
DSE topped on trade is Pragati Life Insurance Limited 25 crore 35 lakh takas of company shares have been traded.
A total of 27 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 50 lakh 42 thousand 956 shares of the companies were traded. The financial value of which is 65 crore 60 lakh taka
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
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