ICB allowed holding over 5% shares of blue-chip firms
In 2020, the BSEC reduced the limit to 5% in a bid to increase the efficiency of ICB
The Bangladesh Securities and Exchange Commission (BSEC) granted the Investment Corporation of Bangladesh (ICB) an exemption regarding its investment ceiling in a single company so that it can invest more in blue-chip stocks.
In a letter to the ICB Managing Director Abul Hossain on Wednesday, the BSEC said the state-owned investment firm can hold more than 5% shares of the blue-chip listed companies only.
Both the bourses maintain their own indices of 30 blue-chip stocks, which are perceived to be of better fundamentals and market liquidity.
Earlier, ICB had the approval to hold up to 10% shares of any listed firm without prior approval of the regulator, but after Professor Shibli Rubayat-Ul-Islam became the BSEC chairman in 2020, the commission reduced the limit to 5% in a bid to increase the efficiency of ICB.
Citing its gigantic funds the ICB recently applied to restore its 10% shareholding ceiling for a single stock, according to the ICB managing director.
"The BSEC extended it for the blue chip stocks only and this would help increase ICB's stake in blue-chip stocks and thus contribute to market stability," he added.
ICB can increase its stake in blue chip companies up to 10% without prior approval.