Dhaka: Mentioning that there is a lot of potential in the mutual fund sector, Bangladesh Securities and Exchange Commission (BSEC) Commissioner Prof. Mizanur Rahman said the mutual fund sector will be the backbone of the capital market in future.
He said the contribution of mutual funds to the country's capital market is 1.5 percent. Hopefully in the next 3 to 4 years it will be 3 percent. And in 5 years, 20 percent of the market capital will be in this sector. We have many opportunities to implement that.
He was speaking as the chief guest at a program titled "The Importance of Mutual Funds in the Capital Market and the Country's Economy" on Saturday (October 10). The program organized by the Association of Asset Management Companies and Mutual Funds (AAMCMF) on the occasion of ‘World Investor Week’.
Dr. Abul Hossain, Managing Director (MD) of Investment Corporation of Bangladesh (ICB) and Asadul Islam, Managing Director of Alliance Capital Management Limited and other MDs of mutual fund spoke on the occasion under the chairmanship of Dr. Hasan Imam, president of AAMCMF.
The key-note paper was presented by the Managing Director of Asian Tiger Capital Partners. Nafiz Al Tariq.
Mentioning that the managers of Bangladesh have shown incompetence, Mizanur Rahman said that there is a lot of potential for mutual funds. The fund manager needs to be more efficient. He called for overcoming the four problems of infrastructure, legal speed mutual funds and making them popular.
"Accountability is very important to investors," he said. In addition, the current commission is committed to implementing the law. This commission wants the capital market to play an important role in the economy.
He said under the able leadership of Prime Minister Sheikh Hasina, Bangladesh's economy is moving forward by facing all the challenges. Mutual funds have not achieved the desired success in the capital market of Bangladesh. However, the market downturn in Bangladesh was more prolonged than in other countries. But despite the many opportunities, the country's fund managers have not been able to show their skills in the field of investment.
The commissioner said the country's mutual funds are governed by a 2001 law. The existing law provided a number of benefits to fund managers. Under the existing law, 40 per cent listed companies, 30 per cent debentures and other products and the remaining 30 per cent unlisted companies had the opportunity to invest. As educated investors, fund managers have failed to show prudence in understanding market movements. As a result, investors have not received the desired dividends from the funds in recent times. The funds have also failed to mobilize the market.
Abul Hossain, MD of ICB, said that ICB first introduced mutual funds in the country in the 1980s. At one time, ICB's mutual funds were popular. ICB also paid 1,000 percent dividend to the holders of 8 mutual fund units.
ICB is still paying good dividends. Only ICB is making good contributions in this sector.
Noting that mutual funds contribute 13 per cent to India's GDP and while only 0.50 per cent to Bangladesh, he said the condition of mutual funds in the country's capital market is limited. Here only Taka 13 thousand crore. Of this, Taka 7 thousand crore is 58 percent of ICB. Less than one percent of the country's market capital. There is a crisis of confidence here and it needs to be brought back quickly.