No efforts from the regulator and the private sector proved effective to pro up the stumbling stockmarket, which yesterday slipped again by more than 3 percent.

Owners of commercial banks, under their platform Bangladesh Association of Banks (BAB), decided on Sunday to launch a Tk 5,000 crore fund to give a financial support to the stockmarket now facing a liquidity crisis.

But the move also failed to leave any long-term impact on the market.

The key index of the Dhaka Stock Exchange, DGEN, came down to 5,473 points after plummeting 180 points.

The BAB will sit with the Securities and Exchange Commission today to discuss the Tk 5,000-crore fund.

Last week, Association of Banks, Bangladesh (ABB), a platform of the chief executives of the banks, also decided in principle to make new investment in the market, within permissible limits.

Before that, a series of regulatory measures to bring back normalcy to the market was surpassed by the chronic liquidity crunch in the bourses.

The regulatory measures included the reinstatement of 10 percent tax rebate facility for stock investment, withdrawal of a 10 percent tax on mutual funds income, reduction of tax at source on brokerage commission by half and formation of an advisory council.

All the initiatives left little impact on the market that witnessed only some occasional gains, analysts said.

While the bankers had promised to inject fresh money to the market, the bank owners decided to launch a market stabilisation fund, which is contradicting, they said.

If the banks can sponsor a fund then why they are not injecting the money into the market through their own portfolios, they questioned.

“The news of the formation of the mutual fund by the bankers prompted the market to fall further,” said Prof Mahmood Osman Imam, who teaches finance at Dhaka University.

“The banks should go for buying shares in their portfolios to boost the investors' confidence,” said Osman, also a member of the index development committee of the DSE.

LankaBangla Securities, a stockbroker, in its regular market analysis said euphoria of investors started evaporating from Sunday afternoon while bankers retreated from their earlier promise.

“The investors booked profit and some went for panic sales speculating no tangible impact of the stabilisation fund,” it said.

The investors took pessimistic view after the declaration, sensing no immediate solution, the stockbroker added.

Earlier, a same nature Tk 5,000 crore Bangladesh Fund was launched to inject liquidity into the market, but the fund tangibly failed to bring liquidity and confidence.

Activities declined on the DSE yesterday with turnover, volume and trade going down by 32 percent, 31.21 percent and 2 percent respectively.

A total of 1.15 lakh trades were executed, generating a turnover of Tk 419 crore. Only 13 shares gained, while 242 declined and one remained unchanged.

News: The Indipendent / Bangladesh/ 25-Oct-2011

Deputy Governor of Bangladesh Bank (BB) Abul Kashem today said Bangladesh Automated Clearing House (BACH) will enhance money flow, trade and commerce for speedy development of Rangpur region. He was addressing the launching ceremony of BACH at Rangpur Branch Office of BB as the chief guest with its Acting General Manager Nur-Un-Nahar in the chair.
“Clients of the region can place their cheque of any commercial bank to local BACH for clearing through magnetic ink character recognition using computerized digital devices by its any other unit in the country for payment within 24 hours,” he said.
Executive Director of BB Das Gupta Asim Kumar attended the launching ceremony as the special guest. Officials of different commercial banks, journalists from both print and electronic media were present on the occasion.
The chief guest said all commercial banks of Rangpur region today became connected with the modern digitized BACH activities under the ongoing modernization programme of the inter- bank money payment system through the central bank.
“Under the programme, the BB launched Automated Cheque Clearing System from October 2010 and Bangladesh Electronic Funds Transfer Network activities from February this year,” he said.
He said Electronic Funds Transfer Network is a newer, faster, safer and cost effective in intra-bank money payment that accelerates money flow from one place to another in the country though the conventional method took up to 15-20 days in the past.
Talking to BSS, senior officials of different commercial banks in the city told launching of the BACH at Rangpur Branch of BB is an epoch-making event that will definitely enhance trade, commerce and accelerate developments of the region.

News: The Indipendent/ Bangladesh/ 25-Oct-2011

Owners of commercial banks yesterday decided to launch a Tk 5,000 crore fund in an effort to give financial support to the stockmarket now facing a severe liquidity crisis.

As a sponsor, the banks will initially pump Tk 1,000 crore into the market through the fund -- Stock Market Stabilisation Fund.

“Owners of 29 banks have promised to contribute at least Tk 20 crore each to the fund, and they will take permission from their own boards within next one week,” said Nazrul Islam Mazumder, president of Bangladesh Association Banks (BAB).

It will be a closed-end fund in nature having 10 years in maturity period. “The total fund size, however, may be increased,” he said.

The pre-IPO (initial public offering) placement will be for Tk 2,750 crore, while the rest Tk 1,250 crore will be raised from public through IPO.

The BAB, a platform of the commercial banks, yesterday sat at a meeting to find out the details of the fund including its formation and structure. Their announcement came after a platform of top executives of the banks -- Association of Bankers, Bangladesh (ABB) -- last week pledged to start fresh investment from this week.

Although the banks are allowed to invest up to 10 percent of their liabilities, most banks' current exposure to the stockmarket is 3 percent on an average.

“We will request the central bank not to include the banks' contribution to the fund in the stockmarket investment exposure,” said the BAB chief after the meeting.

Mazumder also said if any institution wants to contribute more to the fund, it will be allowed.

Apart from banks, he said, insurance companies, non-bank financial institutions and listed firms can also sponsor the fund.

“We have already talked with some listed companies and they agreed to be sponsors,” he said, adding that they can be included in the fund with a minimum Tk 10 crore each.

The fund will be managed either by a newly formed asset management company or by an existing one.

“The entrepreneurs will have no connection in managing the fund. The asset management company will manage it by its own mechanism,” said Mazumder, also chairman of Exim Bank.

Asked whether the fund is related to a 'market stabilisation fund' initiated by the private sector last month, he said, the existing one is an outcome of that initiative.

The private sector had earlier stepped in to rescue the ailing stockmarket with the plan of the market stabilisation fund that also aimed to give a new lease of life to retail investors who incurred losses.

AK Azad, president of the Federation of Bangladesh Chambers of Commerce and Industry, on September 29 announced a concept paper on the market stabilisation fund after a meeting with private sector stakeholders, the stock exchanges and a group of retail investors.

“The purpose of the fund is to mitigate the financial losses of retail investors, especially those who trade on credit,” Azad had said.

However, Mazumder said the new fund will positively impact the market.

“We will go to the Securities and Exchange Commission for permission after the banks receive a go-ahead from their boards to sponsor the fund,” he added.

News: The Daily Star/ Bangladesh/ 24-Oct-2011

Mutual Trust Bank Limited, sponsor of the MTB Unit Fund, a Tk 100 crore open end mutual fund, signed a deed with trustee Bangladesh General Insurance Company Limited (BGIC) in the city on Thursday, says a press release. Managing director and chief executive officer of Mutual Trust Bank Anis A Khan and managing director and chief executive officer of BGIC A K Azizul Huq Chaudhuri signed the deal.
The Securities and Exchange Commission approved the draft trust deed of the fund through a letter dated September 25. Mutual Trust Bank will provide Tk 20 crore as the sponsor of the fund and the rest Tk 80 crore will be collected from the market.
The fund will be managed by asset management company Alliance Capital Asset Management Limited with BRAC Bank Limited acting as the custodian.
An investment management agreement was signed on the same day with Alliance Capital Asset Management Limited.
Managing director and chief executive officer of Mutual Trust Bank Anis A Khan and chairman and managing director of Alliance Capital Asset Management Limited Wali-ul-Maroof Matin signed the agreement.
Anis A Khan said, “We are glad to partner with BGIC and Alliance Capital. We hope this synergy will provide better opportunities for the investors.”
Wali-ul-Maroof Matin said, “This is a buyers’ market at the moment and investing in the market before it sees an upward turn would be a smart thing to do. Investing in mutual fund is always a smart decision.”
MTB’s deputy managing directors Quamrul Islam Chowdhury, Md Hashem Chowdhury and Md Ahsan-uz Zaman, group financial officer Meer Sajed-Ul-Basher, BGIC’s head of structural investment Adnan Alam, chief manager (Share & Investment) Debabrata Banik, ACAML’s  chief investment officer Mohammed Atiquzzaman, head of finance and compliance Hamid Manirul Azam along with other senior executives from all three organisations were present on the occasion.

News: Independent/ Bangladesh/ 24-Oct-2011

Citi Bank NA launched the CitiDirect mobile banking to offer better services to its corporate clients in Bangladesh.
CitiDirect Mobile, the award winning Internet banking platform, directly to users’ mobile phones, providing real-time access from anywhere.

The service will also allow company signatories to receive SMS notifications on pending payments and they can also use their mobile phones to log in to CitiDirect and authorise payments.  Commenting on this, Rashed Maqsood, managing director and Citi country officer-Bangladesh said Citi is committed to bringing world- class solutions to the Bangladesh market and I am delighted that we are one of the pilot countries in Asia for this new functionality.

News: The Independent/ Bangladesh/ 19-Oct-2011