Half of share market investments lost a year

Mahfuja Mukul: Investing Tk 33.5 million in the shares of 36 listed companies, there was a loss of Tk 16 crore. Tk 1.92 crore invested in eight mutual funds and the loss is Tk 81 lakh. Investing in a single bond has resulted in losses. In all, the loss of Tk 16.94 crore after investing Tk 35.99 crore in the stock market. This image is of Prime Finance First Mutual Fund listed in the capital market.
This mutual fund has become a money-making machine for a class of investors, despite being caught in the share business like this. The unit price of the fund has been running like a mad horse recently. The unit price of the fund has tripled in eight months. Dhaka Stock Exchange (DSE) authorities did not issue any warning about this despite the price increase.
However, the increase in the price of the mutual fund is abnormal, the stock market officials say. Even from the asset management company responsible for managing the mutual fund, this price hike is being called unusual. And the capital market regulatory body is saying that if anything unusual is found behind the price increase, action will be taken according to the rules.
Share market people say that most of the listed mutual funds are in a miserable condition. Even at Tk 3-4, some mutual funds are not selling well. Such a situation can’t be normal for a mutual fund to triple in value.
They say that the main sector of mutual fund income is investment in the stock market. Generally, when the stock market is good, mutual funds can make good profits. The stock market has not been doing very well in recent times. As a result, mutual funds also did not do well. A look at Prime Finance First Mutual Fund’s portfolio shows losses where the fund has invested. In this situation, the price increase can’t be normal. There may be some special group behind this price hike.
A review of the data shows that on November 22, the price of each unit of Prime Finance First Mutual Fund was Tk 14.40. From there, the price has gradually increased to Tk 46.80. That is, the price of each unit has increased by Tk 32.40 or 255 percent.
In other words, if an investor bought 10 lakh units of Prime Finance First Mutual Fund on November 22, then his market value is now Tk 32 lakh 50 thousand. As a result, after spending Tk 10 lakh, profit of Tk 22 lakh 50 thousand was obtained in seven months. Which is like getting the fairy tale “Aladdin’s Lamp”!
The rising mutual fund had released its financial report for the three months from January to March this year last April. According to the financial report, the fund lost Tk 1.92 per unit in the three months of trading. The profit per unit was 5 paise during the same period of the previous accounting year.
A review of the portfolio of this mutual fund managed by ICB Asset Management Company shows that the fund has shares of six banking sector companies in its portfolio as of June 30 of this year. The purchase price of the shares is Tk 5 crore 18 lakh. On the contrary, the market price stands at Tk 2 crore 93 lakh 70 thousand. That is, unrealized loss of Tk 2 crore 24 lakh 30 thousand.
Similarly, by investing Tk 3 crore 9 lakh 90 thousand in the shares of two cement companies, the loss was Tk 85 lakh, in a ceramic company Tk 2 crore 31 lakh 90 thousand, the loss was Tk 1 crore 13 lakh 30 thousand, in three companies of the engineering sector, Tk 4 crore 63 lakh 70 thousand. Loss of Tk 2 crore 57 lakh 50 thousand by investment and loss of Tk 3 crore 31 lakh 80 thousand by investment of Tk 4 crore 43 lakh 70 thousand in five leasing companies.
Apart from that, Tk 1 crore 68 lakh 20 thousand were invested in two food companies and Tk 81 lakh, Tk 6 crore 78 lakh 50 thousand were invested in four companies of power and energy sector and Tk 2 crore 92 lakh 10 thousand and Tk 87 lakh 10 thousand were invested in five insurance companies. Loss Tk 38 lakh 50 thousand.
And by investing Tk 31 lakh 50 thousand in a company of various sectors, the loss is Tk 1 lakh 20 thousand, Tk 1 crore 92 lakh invested in two pharmaceutical companies Tk 57 lakh 10 thousand, Tk 53 lakh 20 thousand invested in a telecom company and Tk 10 lakh and three textiles. After investing Tk 1 crore 59 lakh 80 thousand in the company, the loss is Tk 1 crore 19 lakh 30 thousand.
This fund has incurred huge losses despite investing in mutual funds. After investing Tk 1 crore 92 lakh 10 thousand in eight mutual funds, he had to suffer a loss of Tk 81 lakh 40 thousand. In total, the loss in the capital market of Tk 35 crore 99 lakh 10 thousand has stood at Tk 16 crore 94 lakh 90 thousand. In other words, almost half of the invested money is lost in the fund.
A member of DSE said on condition of anonymity that the main investment sector of mutual funds is the stock market. 75 percent of the total investment has to be done in the stock market. So, it is not unusual for a mutual fund that invests in the stock market to triple its price at a loss of around 50 percent. It is natural to suspect that some special group is behind this price hike. The regulatory body should look into the matter.
When contacted, ICB Asset CEO Mahmuda Akhtar told, “I could not sell when it was at the floor price. That’s why I didn’t even arrange the portfolio.
Does this mean you bought all the shares in advance? When asked such a question, he said, ‘Yes, it was already bought. But without looking at the portfolio it is not possible to tell which one to buy when. You have seen that the market was bad for seven months in one year. So, we didn’t even get the chance to change it.
The price of each unit of Prime Finance First Mutual Fund has increased from Tk 14.40 to Tk 46.80. Do you think it is normal or not? When asked such a question, he said, “Of course, I don’t think it’s normal.” Why it is increasing, who wants to buy it can be said better by those who buy it. Normality is not rational.
When contacted, Executive Director and Spokesperson of Bangladesh Securities and Exchange Commission (BSEC) Mohammad Rezaul Karim told, “The price increase of Prime Finance First Mutual Fund will be monitored from surveillance.” If anything unusual is found in the price hike, action will be taken as per rules.