Stocks pull in Swiss fund

Star (March 09, 2011)

A Swiss fund invested around 10 million pounds (Tk 115.79 crore) in the Bangladesh stockmarket during the last four months, when the secondary market was experiencing a massive correction in share prices.

The fund styled “Bangladesh and EM Equity Fund” was created targeting the Bangladesh and some other emerging markets.

The fund sees a huge potential in the Bangladesh stockmarket with the country's economic growth and performances by the listed companies. It will also continue to invest on the Bangladesh market, the fund manager said.

“This country is a big potential for the Swiss fund. We will be here for a long-term investment,” said Roberto Pusterla, member of the management, private banking of Banque Morval, manager of the fund.

Banque Morval is a Swiss bank, while the Bangladesh and EM Equity Fund is an investment fund under Swiss law.

The Swiss fund was launched in Bangladesh in November last year, and still the manager is in process to collect more capital from individual and institutional investors globally.

In the Bangladesh stockmarket, the fund's preferable sectors include pharmaceuticals, power, insurance and banks.

Commenting on the recent market behaviour, Ales Glavan, an adviser to the fund manager, said, with the recent price correction, many of the fundamentally strong companies' share prices came down to far below their fundamental.

“I am talking about good shares, not the junk ones, and it's surprising why the investors here are not buying these shares,” he said.

The Swiss fund is not the only one to focus on the

Bangladesh market. Data on portfolio investment showed that foreign investors or global fund managers are also investing here.

In February this year, the net portfolio investment increased to Tk 8.61 crore, while it was on a downward trend in January. In February, the foreign investors bought shares worth around Tk 51.59 crore and sold worth around Tk 42.98 crore. The figures were Tk 91 crore and Tk 247 crore respectively in January.

However, on the back of a bearish trend in the market, state-run Investment Corporation of Bangladesh (ICB) and seven other state-owned enterprises have recently come forward to give a massive liquidity support to the stockmarket by creating a Tk 5,000 crore fund.

The eight SoEs have formed the fund styled “Bangladesh Fund”, which will be an open-ended mutual fund.

Half of the fund will be utilised in buying shares from the secondary market, while the rest will be kept for the money market.

ICB, Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Bangladesh Development Bank, Sadharan Bima Corporation and Jibon Bima Corporation are the

sponsors of the Bangladesh Fund.