Uncertainty over the size of the capital market stability fund

Sakhawat Hossain Sumon, NewsBangla : As the regulator BSEC prepares to use the Stability Fund in the capital market after 10 months of preparation, uncertainty has been created over the size of the fund due to the position of the central bank.

When the initial plan was to form a fund with undistributed dividends of listed companies, it was calculated that a fund of Rs 21,000 crore would be formed by combining cash and bonus shares.

Of this, bonus shares are more than Tk 14,000 crore. The rest was expected to receive cash dividends.

However, after discussing the formation of the fund and notifying the shareholders of the companies, many have reportedly taken their dividends. In the end, the capital market regulator BSEC calculated that the cash dividend would be between Rs 400 crore and Rs 600 crore.

According to the latest estimates, the fund could be worth Rs 5,000 to 6,000 crore, including bonus shares.

A large part of this fund is expected to come from banks and financial institutions. But if this money does not come in the end, then the committee may be smaller.

The virtual talks between the BSEC, the central bank and a number of other institutions on Monday have created uncertainty over whether dividends from banks and financial institutions will be disbursed.

'Black shadow' in capital market stabilization fund
The central bank has objected to the transfer of unallocated dividends to the capital market stabilization fund.

This is because, Bangladesh Bank thinks, there is a legal hurdle in giving the undistributed dividend to the capital market fund for three years. The Banking Companies Act states that if a person does not take dividends for 10 years, he has to deposit it in Bangladesh Bank. The government will take a decision later.

Although the BSEC is still optimistic, the law will not prevent them from raising funds. Because of this, ownership of this money or shares is not being sought. This fund will only be responsible for the money. The money will be paid in the shortest time as soon as the owners ask.

BSEC Commissioner Sheikh Shamsuddin Ahmed said, “We do not want the funds we want. We will have full information about how much money is being deposited in this fund. There is a provision to explain it to anyone within a month.

‘The rest of the time this money will be used for the stability of the capital market. A separate board of directors has also been formed for this. And policies have been formulated to manage it with great transparency. As a result, there is nothing to be confused about.

“We have an opportunity to discuss this with Bangladesh Bank,” he said.

'Black shadow' in capital market stabilization fund
BSEC Commissioner Sheikh Shamsuddin Ahmed is optimistic that they will receive unallocated dividends from all companies.

Amjad Hossain, general secretary of the Bangladesh Association of Public Listed Companies, an association of listed companies, said, “The problem that has arisen should be resolved through mutual talks between the two companies.”

What is the undistributed dividend of the bank

According to the final calculation of BSEC, Dhaka Bank has 250,000 542 shares as undistributed dividend.

Mutual Trust Bank has 9 lakh 32 thousand 360 bonus shares as undistributed dividend.

Dutch-Bangla Bank has 1 lakh 33 thousand 746 bonus shares as undistributed dividend.

Standard Bank has 72 lakh 70 thousand 124 bonus shares as unallocated dividend.

Mercantile Bank has 6,75,289 bonus shares as unallocated dividends.

Exim Bank has 1 lakh 629 bonus shares as undistributed dividend.

National Bank has 3 crore 15 lakh 44 thousand 184 bonus shares as unallocated dividend.

One Bank has 33 lakh 8 thousand 97 bonus shares as undistributed dividend.

Eastern Bank has 5 lakh 33 thousand 569 bonus shares as unallocated dividend.

Islami Bank has 9 crore 22 lakh 5 thousand 553 bonus shares as unallocated dividend.

Pubali Bank has 5 crore 11 lakh 91 thousand 610 bonus shares as unallocated dividend.

Citibank has 71 lakh 27 thousand 623 bonus shares as undistributed dividend.

Social Islami Bank has 12 lakh 39 thousand 69 bonus shares as undistributed dividend.

Bank Asia has 2 crore 3 lakh 75 thousand 47 bonus shares as undistributed dividend.

Jamuna Bank has 36,419 bonus shares as undistributed dividends.

AB Bank has 72 lakh 13 thousand 569 bonus shares as unallocated dividend.

BRAC Bank has 5 lakh 82 thousand 94 bonus shares as undistributed dividend.

Shahjalal Islami Bank Bank has 47,984 bonus shares as undistributed dividends.

Premier Bank has 2 lakh 1 thousand 35 bonus shares as unallocated dividend.

Uttara Bank has 8 crore 98 lakh 8 thousand 119 bonus shares as undistributed dividend.

Trust Bank has 36,046 bonus shares as undistributed dividends.

Rupali Bank has 11 lakh 57 thousand 956 bonus shares as undistributed dividend.

First Security Islami Bank has 91,731 bonus shares as undistributed dividends.

NRBC has 1,396 bonus shares as undistributed dividends.

Newly listed SouthBangla Bank has 34,221 bonus shares as undistributed dividend.

The amount of cash dividends distributed to these banks is not mentioned in the report of September 1.

What is the undistributed dividend of the financial institution

Among the financial institutions, IDLC Finance has 7 lakh 25 thousand 344 undistributed bonus dividends.

United Finance has 3 lakh 8 thousand 519 undistributed bonus dividends.

People Leasing and Finance has 1 crore 80 lakh 15 thousand 17 undistributed bonus dividends.

Midas Finance has 7,147 undistributed bonus dividends.

Uttara Finance has 5,629 undistributed bonus dividends.

Prime Finance has 3,409 undistributed bonus dividends.

Premier Leasing and Finance has 69,039 undistributed bonus dividends.

Islamic Finance has 1,157 unallocated bonus dividends.

BIFC has 4 crore 43 lakh 70 thousand 379 unallocated bonus dividends.

IPDC Finance has 749 undistributed bonus dividends.

Union Capital has 4,063 undistributed bonus dividends.

BD Finance has 4,422 undistributed bonus dividends.

Phoenix Finance has 6,006 undistributed bonus dividends.

International Leasing and Finance has 7,026 undistributed bonus dividends.

Fas Finance has 1,297 unallocated bonus dividends.

First Finance has 13 lakh 17 thousand 553 undistributed bonus dividends.

Fareast Finance has 2,575 undistributed bonus dividends.

The amount of unallocated cash dividends of these companies is not mentioned in the list made on September 1.

Of funds Thoughts The way

Bank accounts become closed or void due to non-regular transactions or long stay abroad. It does not deposit cash dividends as bank. If the BO account is not renewed for the same reason, the share (stock) dividend is returned to the company without being credited. The company prepares financial statements by showing these as suspended deposits.

'Black shadow' in capital market stabilization fund
BSEC does not understand why Bangladesh Bank is raising objections after 9 months of planning the fund in December

In India, such undistributed dividends are used for the capital market. The country is also thinking about how to improve the capital market using this money.

Discussions on the formation of this fund took place at the end of last year. The formation of the fund was confirmed by issuing a notification on June 26. But so far no objection has been received from the central bank.

Funding In management Board What Doing

A 10-member steering committee has been constituted on August 22 to manage the fund, with former chief secretary Najibur Rahman as its chairman.

Also present on the board are BSEC Executive Director Saifur Rahman, Dhaka University Finance Department Professor Tanjila Dipti, Bhorer Kagoj Editor Shyamal Dutta, Dhaka Stock Exchange (DSE) Managing Director Tariq Amin Bhuiyan, Chittagong Stock Exchange (CSE) Chairman Asifi Vice Chairman Nurul Fazal Bulbul, Chairman of Bangladesh Association of Publicly Listed Companies, Mohammad Tareq, Teacher of Dhaka University and Independent Director of CDBL and AKM Delwar Hossain.

This board has held only one meeting so far. The meeting discussed the issue of less than the amount of unallocated dividend to be deposited.

It has been decided that the company’s claim that the shareholders have been paid dividends will be verified. Initiatives will be taken to audit for this.

৪০ Percent In shares Investment, ৫০ In percent Margin Debt

According to the notification, 40 per cent of the fund will have to be invested in listed shares. Investors will be given margin loans at 50 per cent. And 10 percent of the money can be invested in unlisted companies or government securities, fixed deposits and indefinite mutual funds.

What will be the interest rate of the margin loan of this fund, however, is not stated in the notification.


Source: Daily StockBangladesh by www.dailystockbangladesh.com.

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