Launched in 2009, the mutual fund was scheduled to be redeemed this month
The tenure of the ICB Employees Provident Mutual Fund 1: Scheme 1 (closed-end) has been extended by 10 years on Tuesday. The Investment Corporation of Bangladesh (ICB), the trustee of the scheme, was approved this time expansion.
Launched in 2009, the mutual fund was scheduled to be redeemed this month. After the latest tenure extension it will now expire on January, 2030.
In general, the tenure of closed-end mutual fund is 10 years. However, considering the bearish trend in the country's stock market, the Bangladesh Securities and Exchange Commission has recently issued a notification allowing an extension of the tenure of closed-end funds by another 10 years.
The tenure of ICB Employees Provident Mutual Fund 1: Scheme 1 has been extended in line with this directive from the regulator, sources said.
An official at the Bangladesh Securities and Exchange Commission said the tenures of a big chunk of the closed-end mutual funds were scheduled to be redeemed last year. But if the tenures of a large number of funds come to an end at the same time, it might have a negative impact on the market.
''This is the reason why the regulator, after consulting the finance ministry, issued the notification for time expansion,'' he added.
The ICB Employees Provident Mutual Fund 1: Scheme 1 is managed by ICB Asset Management Company, a subsidiary of state-run Investment Corporation of Bangladesh (ICB).
Golam Rabbani, acting chief executive officer at the ICB Asset Management told the Business Standard, ''We have extended the tenure of the ICB Employees Provident MF 1: Scheme 1 taking into account the investors' interest.''
The ICB Employees Provident Mutual Fund 1: Scheme 1 has an asset of Tk94 crore with a paid-up capital of Tk75 crore. In June 30, 2019, the mutual fund provided a 4.5 percent cash dividend to its unit-holders. At the time, it made a net profit of Tk2.54 crore while its earnings per unit (EPU) was Tk0.34.
In the first quarter (July-September) of 2019-20 fiscal year the fund has made a net profit of Tk8.54 lakh and its earnings per unit (EPU) stood at Tk0.01. During the period, the fund has reported net asset value (NAV) per unit of Tk6.35 (market price), NAV per unit of Tk11.69 (cost price).
ICB Employees Provident Fund is the sponsor of the fund. The trustee and custodian of the fund is Investment Corporation of Bangladesh (ICB).