Asaduzzaman Pallab
Fund managers Monday demanded increased stake of mutual funds in the initial public offerings (IPOs), saying this would encourage small traders to invest in risk-less funds.
Top asset managers also sought amendments to the private placement rules and advance tax cuts at source on dividend income as part of new fiscal measures to help stabilise the country's volatile stock markets.
Top asset managers also sought amendments to the private placement rules and advance tax cuts at source on dividend income as part of new fiscal measures to help stabilise the country's volatile stock markets.
They placed the demand to the newly-appointed chairman of the Securities and Exchange Commission (SEC), M Khairul Hossain .Three new members of the securities regulators --- Helaluddin Nizami, Arif Khan and Amzad Hossain -- were present during the meeting at the SEC head office at Motijheel.
Currently, a company must sell 10 per cent of its IPO to the mutual funds. But managers said the amount was "too little" to satiate the dozens of MFs listed in the country's bourses over the last couple of years.
"We have drawn the attention of the SEC chairman whether the mutual funds can get increased quotas in the IPOs," said Yawer Sayeed, managing director of assets management firm, Aims of Bangladesh.
"The funds' increased IPO stake will encourage more investors, especially the ones who are new and who don't know much about stock trading, to invest in mutual funds. It will minimize their risk," he told the FE.
Presently, 35 mutual funds are listed in the Dhaka Stock Exchange, with the state-owned Investment Corporation of Bangladesh (ICB) operating the bulk of the funds.
Mr. Sayeed said the managers have also demanded tax cuts on dividend income and amendments to private placement rules, which were manipulated by the scamsters during the recent stock debacle."We have also urged the chairman and the members to formulate necessary amendments in the private placement rules so that no irregularities can take place in the future," he added.
Mr. Sayeed said the managers have also demanded tax cuts on dividend income and amendments to private placement rules, which were manipulated by the scamsters during the recent stock debacle."We have also urged the chairman and the members to formulate necessary amendments in the private placement rules so that no irregularities can take place in the future," he added.
"Due to unfair practice in placement process a number of asset managers could not float their mutual funds in the capital market during the last two years," he further added.
Fund managers of leading asset management companies such as Race, LR global, ICB and Prime Finance were present in the meeting.
Fund managers of leading asset management companies such as Race, LR global, ICB and Prime Finance were present in the meeting.
Another manager speaking on condition of anonymity said they pressed the SEC not to slap any new taxes on stock trading and dividend income from the mutual funds.
At present, 10 per cent tax is imposed on dividend income worth at least 25,000 thousand taka.
The fund managers also urged the SEC to take a raft of new measures to restore confidence in the stock market.
At present, 10 per cent tax is imposed on dividend income worth at least 25,000 thousand taka.
The fund managers also urged the SEC to take a raft of new measures to restore confidence in the stock market.
Source: Financial Express (31 May 2011).
