The Investment Corporation of Bangladesh (ICB) has moved to resume full operation of the country's largest-ever unit fund - ICB Unit Fund - by opening the scope of purchasing its units for all investors.
The state-run corporation has taken the initiative as part of its market supportive measures, and for ensuring mass participation in buying and selling the fund.
"We have decided to open the fund for all investors, subject to approval of the securities regulator, to mobilise more funds for the capital market," Md. Abul Hossain, managing director (MD) of the ICB, told the FE.
He also said the ICB's plan is to ensure mass participation in the unit fund, and the investors having long-term investment plan will be benefited by the fund's dividends.
"More funds will be injected into the capital market following full operation of the unit fund," he added.
ICB Unit Fund, whose present size is around Tk 50 billion, was established in April 1981 for mobilising savings through sale of its units to small investors and investing the funds in marketable securities.
The state-run entity has been managing the unit fund. Thousands of senior citizens have units of the oldest unit fund, which has been distributing lucrative dividends year after year.
However, sale of its units has been stopped for a long time as per the condition of a development agreement, signed with the Asian Development Bank (ADB).
The ADB's conditions, among others, also included establishment of the Central Depository Bangladesh Limited (CDBL), and formation of subsidiaries for the ICB.
Subsequently, the ADB provided US$ 80 million loan to the government.
Under the present system, the existing unit-holders of ICB Unit Fund can surrender their units to the ICB. But none is allowed to purchase units of the fund.
Besides, instead of receiving dividends, the unit-holders are allowed to receive CIP (cumulative investment plan) against their dividends.
When asked, a top official of the Bangladesh Securities and Exchange Commission (BSEC) said the ICB is continuing its move to restore full operation of the unit fund.
"The government is positive in considering the ICB's proposal to restore sale of the ICB Unit Fund units."
He also said before approving the ICB's proposal, the government will sit with the ADB.
"The ADB will not oppose the ICB's proposal of restoring sale of the fund units," he opined.
A former ICB official said because of strong investment security many unit-holders of ICB Unit Fund can take loan from the ICB and banks, keeping the units as lien.
"The ICB Unit Fund plays a big role in the market. Its existing unit-holders expect more vibrant management of the fund," he concluded.
The ICB Unit Fund distributed Tk 40 cash dividend per unit for the fiscal year (FY) 2017-18, Tk 45 for FY 2016-17, Tk 43 for FY 2015-16, Tk 42 for FY 2014-15, and Tk 40 for FY 2013-14.