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BSEC Chief: Invest in mutual funds if not properly understand market

  • Published at 02:16 pm October 27th, 2020
Representational photo Bigstock

The BSEC Chairman was addressing a function while inaugurating a personal finance related online portal ‘Amar Taka’ and also at the inauguration of financial literacy program

Chairman of the Bangladesh Securities and Exchange Commission (BSEC) Prof Shibli Robayat Ul Islam on Tuesday suggested those investors in the capital market, who do not have such know how about the capital market, to invest in mutual funds instead of shares.

“Our mutual fund sector is very much promising. Although there was lack of transparency in this sector in the past as the amount of some funds was invested in wrong places. Steps have been taken to return back such investments. It is being ensured that no fund amount is invested in the wrong place. BSEC is trying to enhance transparency and accountability in the mutual fund,” he said.

The BSEC Chairman was addressing a function while inaugurating a personal finance related online portal ‘Amar Taka’ and also at the inauguration of financial literacy program.

He informed that the mutual funds in the country now have the capacity to give 10 to 18 percent dividend while some of the mutual funds are doing well as the return from the mutual funds is much more profitable than the fixed deposits in banks.

The BSEC Chairman opined that the clients can now get 5 to 6% interests on their bank deposits, but on the other hand, investments in mutual funds and in some shares is much more profitable.

He mentioned that the BSEC is working with the public and private sector to make bonds popular as an alternate sector for investment while efforts are going on to bring Sukuk bond in the market.

“If these come to the market, the returns will be good as the investors would need not to pay taxes for making investments here. We’re bringing newer savings products which will benefit people,” he added.

The BSEC Chairman claimed that prior to her joining as the BSEC boss, the market Capital was around Tk3 lakh crore, but now the market Capital has increased to around Tk4 lakh crore.

Noting that the Bangladesh Bank is helping towards development of the Capital Market, Shibli said steps have been taken to address the negative equity problem in the Capital Market.

“Bangladesh Bank can come up with a low-interest fund and this will enhance the investment capacity of the merchant banks. Side by side, the State owned ICB can play a stronger role to stabilize the Capital Market,”

He also urged the authorities concerned to look into the matter whether the local insurance companies can make insurance of bonds. He also called upon the authorities concerned for introducing first party insurance system after withdrawing the 3rd party insurance system which will increase the income of the companies. Insurance Development Regulatory Authority (IDRA) Chairman Dr M Mosharraf Hossain while addressing as special guest said they have taken steps to reduce the cost of the insurance companies.

“Earlier, expenditure of insurance companies was 65-70%. We have taken steps to bring down such expenditure at 15% for  which a good reaction is being seen among the shares of the insurance companies,”

Bangladesh Institute of Capital Market (BICM) Executive President Prof Dr Mahmuda Akhter graced the function as the guest of honour while former President of CFA Society Bangladesh Shahidul Islam made the key-note presentation. The program was chaired by ‘Amar Taka’ Editor Ziaur Rahman.

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