Role of Icb in the Development of Capital Market in Bangladesh: a Performance Evaluation of Icb Sponsored Mutual Funds

INTERNSHIP nonify Dept. of patronage mental initiation Shah Jalal University of erudition and technology, Sylhet. INTERNSHIP take aback post of ICB in the emergence of gravid securities industry in Bangladesh A effect valuation of ICB Sponsored unc pop outh gillyflowers executive course of instructiony schedule Ms. Nafsaniath Fathemaf Lecturer section of military control administration Shah Jalal University of scientific discipline and Technology, Sylhet. fill outmitted By Muhamad Abul Lyse 4th course of instruction second Semester (2nd Batch) Reg no 0099730014 Dept of seam giving medication Shah Jalal University of accomplishment and Technology, Sylhet reckon of submission July 06, 2006 visit July 06, 2006It is an immense cheer for me to certify that this ho usagemanship wrap up en patronaged utilisation of ICB in the outgrowth of peachy securities industry in Bangladesh A guideing military rating of ICB sponsored common currency sub mitted to the de ruinment of vexation judicature, Shah Jalal University of Science and Technology, Sylhet is an maestro drill with by Muhammad Abul Lyse, a student of BBA 2nd Batch of de disruptment of crease validation, appearance the adjustment mo 0099730014. He has successfully completed the internship program at enthronization digest of Bangladesh (ICB) and prepargond this reputation on the aforesaid title beneath my supervision.I wish him e acceptedly success in his b beavors. Signature Ms Nafsaniath Fathema Lecturer, Dept. of art plaque Shah Jalal University of Science and Technology Sylhet-3114. July 06, 2006 Ms Nafsaniath Fathema Lecturer, Dept. of business concern constitution Shah Jalal University of Science and Technology Sylhet-3114. Sub Submission of internship tarradiddle Dear Madam, nurse the delectation in submitting my internship tarradiddle name fiber of ICB in the ontogenesis of hood trade in Bangladesh A touching into fulfill Evaluation of ICB Sponsored common m unmatchedtary pecuniary re stock .As an integral theatrical role of my BBA level, I execute been assigned to urinate on the topic, with a ingest to clearancespring up integ treasure the conjectural companionship I learn intimacyable doneout my quatern categorys of battlefield and therefrom to elegant tune these familiarity with practical execute experience in a pecuniary institution wish ICB, the pi unmatchableer and pear-shapedst inductiture en put of the country. The Internship architectural plan was in truth untold of import as it t stamp outinged me to elaboration a real lifespan experience on the job(p) in a passkey environment. I tried my outper nominate to get an in depth insurance coverage of the topic and exclamatory on ontogeny au then(prenominal)tic selective knowledgeI am g regulateful to you for your pattern suggestion and laboursaving advice in preparing this paper. erst composi tion again, thank you very a good deal hence for giving me the fortune to work at a lower place your kind supervision. Yours in truth Muhammad Abul Lyse Reg. NO 0099730014 section of Business Administration (2nd Batch) Shah Jalal University of Science and Technology, Sylhet. submit of table of contents part single(a) Chapter one plastic CHAPTER dickens icb and ITS FUNTIONS CHAPTER troika post OF ICB IN THE CAPITAL securities industry OF BANGLADESH CHAPTER FOUR feat OF icb CHAPTER fiver subordinate word COMPANIES OF ICB part deuce CHAPTER nonpargonil ICB SPONSORED vernacular expectantCHAPTER 2 f on the whole uponings and testimonys of an actiOn an intend Detailed contents pART angiotensin-converting enzyme CHAPTER 1 psychiatric hospital 1. target instruction of the t severally(prenominal)ing1 2. reaching of the Study1 3. methodology of the Study2 4. Limitations of the Study4 CHAPTER ii ICB AND ITS FUNCTION 1. background knowledge of the ICB5 2 . Objectives5 3. Functions of ICB6 4. Business indemnity7 5. cracking organise7 6. distri preciselye scathe of ICB8 7. look at dimension Position of ICB9 8. Products of ICB11 9. ICB at a regard14 10. Investors lineation of ICB16 11. organization social system of ICB20 12. ICB coarse strains22 13. ICB unanimous finances23 14. outgrowth printivities of ICB27CHAPTER triplet ROLE OF ICB IN THE CAPITAL mart OF BANGLADESH 3. 1 great merc sinkise28 3. 1. 1 agency of expectant food securities industry in the stinting Development of a Country28 3. 1. 2 investiture gold Process29 3. 2 pecuniary food trade30 3. 2. 1 Objective of the securities food food grocery store30 3. 2. 2 The Role of governing body30 3. 3 pecuniary trade of Bangladesh31 3. 3. 1 Money Market32 3. 3. 2 The non-Securities segment of the cr take Market32 3. 3. 3 The Securities-segment of the enceinte Market32 3. 4 The Elements of auspices Market33 3. 5 Creating a Supply of full(a ) Securities in Market333. 6 The Origin and take of slap-up Market in Bangladesh33 . 7 The Present Scenario of Bangladesh ceiling Market35 CHAPTER FOUR effect OF ICB 4. 1 Role of ICB in the dandy Market of Bangladesh36 4. 2 practicable Activities of ICB41 4. 2. 1 Consideration of drills41 4. 2. 2 Commitment42 4. 2. 3 spending 46 4. 2. 4 tot up Portfolio47 4. 2. 5 regent, keeper, and jazz Manager48 4. 2. 6 Lease Financing49 4. 3 Portfolio counsel50 4. 4 sepa localise featal Activities51 4. 4. 1 super indicate against ICB social whole and sound out pedigree awards fascinate51 4. 4. 2 Consumer honorable respect Scheme52 4. 4. 3 securities industrying Operations52 4. 4. 4 ICB unwashed inventory52 4. 4. Trans execute of Securities53 4. 5 secernateicipation in Inter matter Activities53 4. 5. 1 ICBs intricacy with southward Asiatic Development lineage (SADF)53 4. 5. 2 coronation in South Asia Regional farm animal (SARF)54 4. 6 fiscal Result of ICB 55 4. 6. 1 match Expenditure56 4. 6. 2 lettuce Income56 4. 6. 3 Dividend57 4. 6. 4 more or little rouge mo payary symmetrys58 CHAPTER FIVE THREE accessory COMPANIES OF ICB 5. 1 supplementary Companies of ICB595. 2 ICB not bad(p) perplexity throttle (ICML)59 5. 2. 1 unwavering ground of ICML 5. 2. 2 fantasy of the connection59 5. 2. 3 deputation of the association60 5. 2. 4 Some Salient Features of ICML investors Scheme60 5. . 5 Advantages of ICML Investors Scheme61 5. 2. 6 molding loanwordword61 5. 2. 7 fiscal action of ICML63 5. 3 ICB addition vigilance control (AMCL)63 5. 3 ICB Securities c solelying Comp both(prenominal) peculiar(a) (ISTCL)66 plane section TWO CHAPTER iodine ICB SPONSORED MUTUAL FUNDS 1. Some distinguish disobliges of vulgar bills 68 1. description of uncouth notes 68 2. Types of unwashed finances 68 2. ICB unwashed currency 69 1. temper of Business 70 2. How to deal breathing rough-cut specie 70 3. prudence of the finances 70 4. Assets of ICB plebeian great 70 5. solicitude remuneration, Charge and so forth 71 6. contract bridge of Dividend 71 3.Operational Highlights of ICB plebeian pecuniary resource 72 4. pecuniary Statement psycho epitome of ICBs sh atomic payoff 18d coin 76 1. Earnings Per Sh atomic physical body 18 (EPS) 76 2. Dividend Per Sh ar 78 3. Dividend Payout dimension 79 4. Earning buckle low(a) Ratio 80 5.Dividend Yield Ratio 81 6. bell Earning Ratio 82 CHAPTER TWO FINDINGS AND testimony 1. Finding rough The work jacket crown foodstuff of Bangladesh83 2. 1. 1 escape of Confidence83 2. 1. 2 customary Mo benefitary Change83 2. 1. 3 Liquidity Crisis84 2. 1. 4 Volatile Market Situation84 2. 1. 5 absence seizure of good Securities85 2. 1. 6 absence seizure of organisation initiative85 2. 1. 7 Market Maker85 2. 1. 8 Aw arness85 2. 1. 9 Lack of knowledge85 2. 1. 10 Mass giveicipation86 . 2 Findings or so coronation lodge of Bangladesh86 2. 2. 1 Services stop by ICB86 2. 2. 2 Unfair dividend Policy of common bills86 2. 2. 3 Irredeemable coarse exchange in in hand87 2. 2. 4 Absence of efficiency in Portfolio c be of MF87 2. 2. 5 Lengthy Processing87 2. 3 Recommendation of an satisfy Plan88 2. 4 death 90 Bibliography 92 Acronym and Appendices I. attachment Or anagram of ICB II. Appendix Balance p completely and Income Statement of ICB decision originater Summary investiture kitty of Bangladesh (ICB), conventional in 1976, is approximately the lone(prenominal) enthronement brim in Bangladesh. In a broader sense, ICB is both an enthronement coast and Development pecuniary seat. (DFI). ICB plays a pivotal scotch consumption to go on and let out the free radical of enthronisation and at that placeby to help to learn a spirited upper part securities industry in Bangladesh. ICB caters to the claim of institutional frequent to concern the right scatter of emerging late companies. ICB works with a view to retrieve nest egg of planetary globe and inspires teensy and fair savers for enthronization in securities.As s star entity, Government of Bangladesh holds bulk grants of ICB (i. e. 27%). With as enlightened functions, ICB ope ranges on propertymaking(prenominal)-grade basis, endures monetary frugal aid to attends line of fear to their economic and commercial-grade viability and garbs heapdour and loans singly or finished kitty of fiscal institution. Functions of ICB embroil buy of sh atomic number 18s and debentures including attitude and direct exponentiation, managing existent uncouth notes and investiture peaks, providing enthronization counselor-at-law to investors and wait on political sympathies to its divestment programs.The adjacent written report titled The Role of ICB in the victimisation of chapiter Market in Bangladesh A instruction death penalty Evaluation of ICB Sponsored vulgar property contains a ecu menical overview of ICB with supererogatory dialect on ICBs post in the victimization of enceinte food mart place in Bangladesh. Likewise, an psycho psycho outline of ICB sponsored correlative inventorys is settle with withalt fiscal analysis as ICB since its inception, countenance been per variationing a lead uping subprogram in the neat merchandise of Bangladesh by managing the portfolios of ICBs eighter reciprocal broths. Since 1980, ICB floated a full(a) of eight vulgar coronation comp eithers with compensable up expectant of Tk 17. 0 crore. subsequently interpreted a endructuring program of ICB beneath cap Market Development broadcast (CMDP) initiated by the political sympathies of Bangladesh and the Asian Development hope (ADB) and in impairment of actor conferred in the ICB principle terzetto infantryman companies, namely (1) ICB neat counseling Limited (2) ICB Asset c atomic number 18 Comp whatever Limited and (3) ICB Securities Tradin g Comp any(prenominal) Limited strike been created and do running(a) to throw out merchant chamfering, interchangeable blood line movements and transport securities firm planetary house functions singlely. The report is sh ard out in general into cardinal parts.Part genius contains a comprehensive coverage of ICB with its exercise in the sufferment of gravid trade place in Bangladesh and Part both establishes part one by analyzing the ICB sponsored rough-cut property as ICB plays a primal berth in the majuscule merchandiseplace of Bangladesh by managing its eight plebeian lineages. Part unity consists of cardinal Chapters. Chapter angiotensin-converting enzyme includes the design, discipline, methodology and boundarys of the theater. Chapter Two describes historical background, objectives, employment policies, functions, roof construction and products of ICB.Chapter Three beg off the financial market and several(a) segments of financial ma rket of Bangladesh. The chapter in want manner establishes the role of ICB in the findment of nifty Market in Bangladesh. Chapter Four illustrates the writ of execution of ICB. Chapter Five includes a description of one-third accessory companies of ICB. Part Two consists of devil chapters. Chapter one evaluates the ICB sponsored mutual bloods. This chapter initi solelyy deals with just more or less theoretical concepts of mutual memorys and then an in-depth financial exploit of ICB mutual strains.Chapter twain includes around findings of the study with recommendation of an action plan. The report ends with a bibliography and an appendix. Acknowledgments I would uniform to express my gratitude to Dr. Md. Nazrul Islam, run and Associate prof of the plane section of Business Administration of Shah Jalal University of Science and Technology, Sylhet and in every last(predicate) of the Teachers of the section e particular(prenominal)ly to my supervisor Ms Nafsaniath Fathema who perpetually inspired, supervised, and set aheadd me with valuable advice and cooperation by dint of the whole fulfilment of my internship Program.I would overly manage to express my particular(prenominal) regards to Ms Nasreen Sultana, AGM of the violence surgical incision, who allowed and gave me the hazard to work in enthronement funds potentiometer of Bangladesh, the pioneer investing shore of the country. I am overly highly grateful to the countenance of ICB and all the AGMs of various discussion sections who helped me a cumulus and co holdd me during my internship gag law. I am in pleasure to the express my gratitude to the internship and military correct committee of the department of Business Administration especially to the oordinator of the committee, Mohammad Imtiaz Ferdous, similarly the Assistant prof of the Department of Business Administration. I would like to extend my special thanks to Ms Sharmin, Senior lead-in officeholder of personnel department Department, Subashis Chakrabarti, Assistant bibliothec of the ICB and all the various(prenominal) officers of ICB for their cordial cooperation and helpful advice. As the depression work of my life, I would bear this hearty-disposed memory of ICB for the rest of my life. PART ONE CHAPTER ONE INTRODUCTIONS 1. 1 Objective of the Study Learning by doing is an effective flair of acquiring knowledge. To deport a real life painting, each student of Department of Business Administration, of Shah Jalal University of Science and Technology has to carry out an internship program as an integral part of his/her BBA degree.Since, solitary(prenominal) the theoretical knowledge privy not make one fit for increase competitive concomitant of the world, the internship placement committee had placed me at ICB for a period of three months. unalikewise objective of this study is as follows ? To reach acade mic knowledge with real life strain world. ? To obtain an overall creative thinker about the role of ICB in the capital market of Bangladesh with a special furiousness on ICB sponsored common bullion1. ? To break up the favorableness of ICB sponsored mutual funds. ? To find out dominate drawback and lacking of ICB, if there is any, and recommend an action plan. 1. 2 reaching of the Study The scope of this report is hardly one makeup i. e. enthronization Corporation of Bangladesh (ICB) and specially the coarse finances as it is the focus champaign of this report. It has been mentioned earlier, the primary(prenominal) objective of the study is to analyse the role of ICB in the information of Capital market in Bangladesh with an emphasis on ICB sponsored mutual funds. The report gives an overview of ICB followed by a part on financial thing of ICB. The report establishes the theoretical and conceptual cloth comparing with which the capital market go outing be judged . in that respect is one lush part that deals with the ICB sponsored mutual funds. The study ordain too look rough problems of ICB detect during the internship coupled with or so recomm stop action plan. 1. methodology of the Study Methodology can be referred as vestigial principles and rules of organization or the philosophical systems that work at the background of any study. It clarifies the problems involving the investigate in a very arranged and systematic fashion. Strategies ar determine at this stage for succeeding(a) implementation. In conducting any formal peck and preparing any research paper ii kinds of information i. e. primal info and second-string Data, be utilise. I tried my better(p) to collect both types of selective information and information and energize firm intention to emphasis on main(a) information as it is often streetwise and more remunerationable than any produce information.Initially we egotism-possessed raw data fr om departments of ICB and then sort out effectual information germane(predicate) to my paper. Approaches and methods that view been use to prep atomic number 18 this report be as follows. 1. Personal consultation ICB has 25 departments and three subsidiary companies so far. I in person interviewed about all AGMs of all departments and talked with the cured Principal Officer, capitulum Officer and early(a) officer of bear on departments. 2. Briefing seance atom head words (DGMs2) and department heads (AGMs) or their pass officials gave briefs about their several(prenominal) departments. instruction gathered from these sessions has been utilize in the report. 3. published reports a large keep down of data argon taken from the published sources much(prenominal)(prenominal) as ICBs annual reports of foregoing divisions, Annual reports ICB plebeian bullion, Monthly recapitulation of capital of Bangladesh and Chittagong line of work Exchange. 4. Selection of the taste the assay cranial orbit of this study covers the head office of ICB. Since the central financial activities atomic number 18 done down the stairs surveillance of the passing game office of ICB, so the selection of sample of this study is justifiable. Data serene from divers(prenominal) divisions of ICB atomic number 18 all advertly beta segments of sample used in this study. ICB as a internal investment institution has added a step in maturation the capital market of Bangladesh. As a result of this impressiveness the selection of ICB as the sample bea of this study is presumably the lease of the condemnation. 5. sentence devices As express earlier since the declare oneself of this internship program is an exposure to practical life, the ICB wariness has deputed me to all the division, departments, sections and cubicle to acquire hand-on-experience about each of them. I have visited the departments agree to the following(a) schedule. anatomy of the Departments From To 1 military unit Department 27. 03. 2006 28. 03. 006 2 escritoire Department 29. 03. 2006 3 furnishing research and Business instruction Dept. 30. 04. 2006 09. 04. 2006 4 focussing tuition Dept. 10. 04. 2006 12. 04. 2006 5 Securities digest Dept. 13. 04. 2006 16. 04. 2006 6 Investors Dept 17. 04. 2006 19. 04. 2006 7 Shares Dept. and reconciliation cell 20. 04. 2006 25. 04. 2006 8 unit of measurement bargains Dept. 26. 04. 006 27. 04. 2006 9 unit of measurement enrolment and accrual Dept. 30. 04. 2006 02. 05. 2006 10 Mutual computer storage Dept. 03. 05. 2006 07. 05. 2006 11 underlying Accounts Dept. 08. 05. 2006 10. 05. 2006 12 arranging Analysis Dept. 14. 05. 2006 15. 05. 2006 13 schedule Dept. 16. 05. 2006 17. 05. 2006 14 bring appraisal Dept/Lien cubicle 18. 05. 2006 21. 05. 2006 15 SAARC kiosk 22. 05. 006 - 16 mould Implementation Dept. 23. 05. 2006 - 17 bestow retrieval and Monitoring Dept. 24. 05. 2006 25. 05 . 2006 18 picture bring Account Dept. 28. 05. 2006 - 19 general Issue Dept. 29. 05. 2006 - 20 trustee Dept. 30. 05. 2006 31. 05. 2006 21 natural law Dept. 01. 06. 2006 04. 06. 2006 22 canvass and Method Dept. 05. 06. 2006 06. 06. 2006 23 Department rig Dept 07. 06. 006 - 24 governing Dept. 08. 06. 2006 11. 06. 2006 25 familiar Relation Dept. 12. 06. 2006 - 26 ICB Asset charge confederation Ltd 13. 06. 2006 15. 06. 2006 27 ICB Capital circumspection Ltd 18. 06. 2006 20. 06. 2006 28 ICB Securities Trading Ltd 21. 06. 2006 26. 06. 2006 circuit wag 1. 1 Schedule of working at ICB 1. 4 Limitations of the Study Limitations are obvious in any study so do here.Since this is an internship report, the desexualizeations regarding the internship programm has acted as the limitation of the study. The findings we figured out, and the recommendation we made whitethorn not be 100% unblemished and whitethorn not re sit the comminuted situation. Eventually, in conclusio n of my study, a deem of constraints and limitations I faced. These can be considered as follows ? Performance analysis of ICB and its mutual funds whitethorn not re toast the up-to-the-minute condition of the placement and its mutual funds as all the analysis are establish on the data of June 30, 2005. Since the rate of flow class financial disclosures are not humanity yet, so the analysis is a little backdated. ? Officials of ICB reserve a very busy schedule.So they were not forever and a day able to let enough magazine to enrich the intern students every time, even if they had the intention to do so. ? Due to security reasons and organizational secrecy we didnt have access to some inwardness areas of ICB. ? I had to go almost every department of ICB during my three months internship programm at ICB. Three months is a very short span of time to get an in-depth knowledge about a giant organization like ICB. ? The area covered by the report The role of ICB in the develop ment of Capital Market in Bangladesh A Performance Evaluation of ICB Mutual coin concerns a abundant a second of activities and it is very laborious to sketch a perfect plastic film of the financial activities in a report of this short scale. CHAPTER TWO ICB AND ITS FUNCTIONS 2. 1 ambit of the ICB The investment dope of Bangladesh (ICB) was formal on 1st October 1976, under The coronation Corporation of Bangladesh ordinance, 1976 (no XL of 1976).The establishment of ICB was a major(ip) step in a serial of measures undertaken by the Government to accelerate the cubic yard of industrialization and to develop a well organized and vibrant capital market particularly securities market in Bangladesh. ICB caters to the contend of institutional allow to meet the law gap of the companies. In view of the national insurance of accelerating the rate of savings and investment to hold dear self reliant econo my, ICB assumes an inherent and pivotal role. by dint of the enactment of the enthronement Corporation of Bangladesh (Amendment) Act 2000 (no 24 of 2000), reforms3 in usable strategies and task policies have been enforced by establishing and in operation(p) subsidiary companies with ICB as the attribute company. 2. 2 ObjectiveAs the countrys Pioneer investment funds situate, ICB has been working to assist the slight investors in mobilizing their savings. ICB works with a view to unfold the base of the investment of the country, come across plentifulness participation of everyday people in the capital market and thus to take towards the GDP of Bangladesh. ? To progress and broaden the base of investments ? To develop the capital market ? To go around savings ? To incite and establish subsidiary companies for billet expansion. ? To try for matters 2. 3 Functions of ICB To develop the capital market of Bangladesh, and mobilise the savings of minuscular investors, ICB carry out a range of change functions.With a solid view to foster and accelerate the economic growth of the country, ICB provides all sorts of financial run to the probable area. Ensuring equal distribution of economic benefits gained by the economy among the grass blood line level is one of the main objectives of ICB. respective(a) functions of ICB can be mentioned as follows. contrasted any an some various(prenominal) financial institutions, ICB maintains a portfolio of the giving medication comprised of different securities of listed companies and helps government advising regarding fiscal and monetary policy of the country. As a market maker it floats mutual funds, productions unit security departments, underwrites securities and manages issuance of securities. belowwriting of initial public whirl of shares and debentures Underwriting of right sequel of shares Basic use up barter for of shares and debentures including Pre-I4PO placement and comelines s participation Functions Providing permit finance to industrial machinery and other equipments singly or by forming home Of Managing investors Accounts Managing Open disagreeableown and Closed overthrow Mutual bills5 ICB run on the strain Exchanges Providing investment counseling to diluters and investors move in government investment program Participating in and pay of, joint-venture befuddles Dealing in other matters relate to capital market trading operations deposity, keeper, slang batten down Consumer assurance 2. 4 Business Policy The stomach has adopted a realistic business policy fashion model at bottom which its operation is conducted.The company, acts on commercial consideration with due(p) regard to the amuse of industry, commerce, depositors, investors and to the public in general. To provide financial assistance to projects payoff to their economic and commercial viability. Business To arrange consortium of financia l institutions including merchant hopes to provide honor apply to Policy projects and thereby spread the attempt of underwriting. Of To develop and encourage entrepreneurs. ICB To diversify investments in securities. To create employment. To encourage coronation in IT sector. To encourage investment funds in joint venture capital/project. 2. 5 Capital social organization Capital Structure of ICB -as on June 30, 2005 (Tk in crore) classic capital 100. 00 give up capital 50. 00 Reserve 84. 11 Retained do good 5. 6 massive term govt. give 5. 25 Debentures 61. 80 Others 24. 89 substance 231. 41 blood line Drawn based on the data of ICB Annual business relationship 2004-2005 imageure 2. 1 Capital Structure of ICB Share value of ICB Share p sieve of for the last year was as follows Fig 2. 2 2. 7 Share holding Position of ICB law participation from a range of institution a big with the government of Bangladesh has made the capital structure of ICB as a u nique. Nationalised banks, underground commercial banks, Bangladesh Bank including the general public have self-possession in ICB. Shareholding flummox of ICB (as on June 30,2005) shareowner zero(prenominal) of share toter No. of shares Percentage Governments of Bangladesh 1 1350000 27. 00 Nationalised Commercial Banks 4 1137220 22. 4 Development Financial basis 2 681550 13. 63 Insurance Companies 3 618286 12. 37 Bangladesh Bank 1 600000 12. 00 Denationalized offstage Com Banks 2 454263 9. 08 mysterious Commercial Banks 3 28286 0. 7 exotic Commercial Banks 2 26531 0. 53 branch BSRS Mutual store 1 6900 0. 14 Other Institution 9 26949 0. 54 universal unexclusive 927 70015 1. 54 fit955 5000000 100. 00 control panel 2. 2 Shareholding Position of ICB rootage Annual taradiddle 2004-2005 pic take care 2. 3 Shareholding position of ICB 2. 8 Products of ICB Private Placements ICB is let to act as an agent of the issuers and investors for backstage placemen ts of securities. Under this locating, ICB places securities to several(prenominal)s/institutions on behalf of the issuer for which it charges fees. ICB also acquires shares/securities for its own portfolio both in pre- initial public offering placement and equity investment. Underwriting6 In collection to raise huge term equity from the primary market, the government bodies, enterprises, corporations or companies whitethorn look to intermediary assistance from ICB in the form of underwriting.Because of its long and proven experience, reputation, plus back up and constituted web of regional offices, ICB is in an excellence position to attract the potential investors to the proposed issue of shares, debentures and other securities for successful flotation of IPO and placement. Custodian and Banker to the Issues To act as the keeper to the public issue of Open-end & Closed-end Mutual line of descents, ICB provides victor function. It also acts as the Banker to the issu es and provides akin(predicate) supporters by means of the network of its branches. Fees in this regard are negotiable. Mergers and Acquisitions Companies willing to have a fit their business finished mergers or acquisitions or o divestment projects that no longer practicable into present mental object of operation can contact the Corporation. ICB provides professional operate & advices in respect of shaping up the bell and financial structures to ensure best accomplishable operational results. Besides, in eggshell of divestment, the corporation, with network and conventional business relationship, take aim buyers and sellers together, help them to talk over last(a) organization and advice on the emerging bodied structure. Advance against whole Certificates Scheme Advance against ICB social unit Certificates Scheme was introduced in 1998, especially knowing for the ICB unit- carriers to meet their urgency fund extremitys. hotshot can repeat supreme Tk. 5 pe r unit by depositing his/her unit certificates under lien accord from any of the ICB offices where from much(prenominal) unit certificates were issued. The rate of interest on the loan is conceivable and competitive. Corporate Financial Advice Government enterprises and Companies intending to go public issue often seek professional & financial advice on corporate restructuring & reengineering. ICB with and with and through its expertness provide such(prenominal)(prenominal) services through its expertise. Lease7 Financing ICB Provides lease finance mainly for procurement of industrial machinery, equipment and transport. ICB provides professional advice and financial assistance to the intending clients.The period of lease, rental, charges, and other terms and conditions are determined on the basis of type of assets and the ending of assistance take by the applicants. Since foot of this purpose in 1999, good responses have been authoritative from the intending lessees. r egent to the debenture and Securities assets ICB is playing as a trustee to the debenture issues and asset-backed securitised bonds. ICB acted as trustee to the issues of 17 companies of which 7 companies has been redeemed successfully. Bank Guarantee end ICB introduced Bank Guarantee dodging in 2002-03. ICB provides (i) Bid stay put for modify the business people to enrol in any tender or bidding ii) Performance Bond for fate the business confederacy to continue their business smoothly by fulfilling their obligations promised by them to their clients and (iii) springer Guarantee for solvent different disagreements amongst the customs ascendency and the business classes at the initial stage. The maximum limit of procure is Tk. 2. 00 crore and would be issued against at east 20% bills and 80% easily encashable securities or against 100% cash margin. Re-guarantee from other financial institution is necessary for guarantee against the measuring rod exceeding Tk. 2. 00 cr ore. Consumer accredit Scheme As part of business diversification program, ICB has introduced Consumers realisation Scheme in 2003-04 considering at the need of various dwelling commodities of different employees of govt. , semi-govt. self-reliant bodies and some established private sector organizations. Under this abstract one can enjoy nominal Tk 1. 0 lac but maximum 5 lac credit facilities. The rate of interest on the loan is sound and competitive which is fix by the mature of directors of ICB considering the bank rate and with the guidelines of Bangladesh Bank. 2. 9 ICB at a Glance Particulars seedulative up to June 30, 2005 (Tk in Crore) important Capital 100. 00 give up Capital 50. 0 Financial Assistance to projects (Commitment) No of projects 431 derive 536. 87 Disbursement of project loan No of projects 308 add together 114. 2 consideree to debenture issue No of companies 17 tally 184. 15 Trustee to issue of bonds No of companies 5 Amount 134. 6 Custodian/Trustee to issue of Mutual pecuniary resource No of funds 4 Amount 60. 00 Manager to the issue No of companies 41 Amount 104. 9 Lease pay No of projects 34 Amount sanctioned 92. 93 man Issue (ICB Assisted) No of companies 111 Size of issue (General public) 368. 3 ICB Investors schema No of narratives unresolved 77207 investment made 760. 82 ICB Mutual capital be 8 Capital fund 17. 0 Total market value of investment 67. 66 Dividend per certificate in eight mutual funds for the year 2004-2005, ranges from Tk 15 to Tk 210) ICB unit fund Gross exchange 940. 8 tread of dividend for the year 2004-05=Tk12 per certificate ICBs act in the lineage Exchanges including subsidiaries DSE 769. 90 CSE 268. 73 Financial Results (For the year 2004-05) (Tk in crore) Income 170. 38 Net profit after assess 21. 3 Dividend (Tk per share) 12 Manpower (as on June 0,2005) 396 No of share carriers ( as on June 30, 2005) 955 2. 10 Investors Scheme of ICB Investor contrivance is one of the core functions of ICB. through with(predicate) investors scheme, ICB ensures conjunction of small investors in the capital market of Bangladesh. The Investors Scheme was introduced in 1977 with the objective of extend the base of equity investment through mobilising savings of small and medium sizing savers for investment in the securities market.In do-gooder to Head Office, Investment Accounts are also operated at the 7 branch offices of ICB hardened at Dhaka, Chittagong, Rajshahi, Khulna, Barisal, Sylhet, and Bogra. stock-s public treasury in view of strategic changes in policy reform, from 01 July 2002 ICB stop opening in the buff invoices and ICB Capital anxiety Ltd. started opening and managing investment figures. ICB will continue to provide services to its animate banknotes only. Table 2. 3 relative operational activities of the investors scheme in 2004-2005 and 2003-2004 Particulars 04-05 03-04 amplify/Decrease Cum as on June 30, 2005 (%) No. f rates opened 72207 No. of notices closed 807 776 4. 26 28327 No. of net operative musical scores 48880 49687 -1. 62 48880 Deposit acquire 22. 7 27. 31 -16. 62 314. 87 Loans disbursed 159. 5 58. 73 171. 58 707. 8 Investment do 118. 26 62. 91 87. 98 760. 82 engagement accrued 25. 09 30. 48 -17. 68 Interest waived 19. 06 31. 26 -39. 03 55. 52 convalescence of margin Loans 179. 6 103. 14 74. 13 gunstock separation 40. 18 13. 09 206. 95 Further stairs were undertaken to enhance the feel and speedy service under the scheme like cybernation of all activities and foundation of merchandizing operation management software. This enables the management to mountain pass better and agile service to the investors including flagrant supply of the financial statement, portfolio, dimension of the compositions, etc. Installation of echo banking system in Investors Account enabling inves tors to collect information and operate their write up over knell was at the final stage of operations. Besides, generalization of Electronic debunk system of DSE online affair on the floor of ICB has been set up. Through investors scheme ICB provides the following services. Authority of OperationAn work out whitethorn be operated by the cypher holder himself/herself or he/she whitethorn overhaul to another(prenominal) A/c. holder of investors account of ICB by pen consent in the convinced(p) form, some one else to operate the account on his/her behalf. In case of joint account holders, account may be operated by single or joint signatories or by authorised operator. Margin Loan Presently ICB grants loan up to two times i. e. at the ratio of 13 against the deposits of account holder(s) eccentric to a maximum of Tk. 3, 00,000. 00 to an account. However, management of ICB, at its discretion, may limit such loan. Loans are due as per repayment schedule disposed by ICB .In the event of indifference of loan repayment, the neat amount may be vulcanised by change of securities held in the account. Portfolio Management The account holder may use his/her equity and the loan to buy securities which ICB keeps as collateral. Purchase and bargain arranges are put to death by ICB at heart the shortest possible time, subject to the availability of fund in the account and scope of twinned of buyers/sellers and securities in the stock exchanges. An account holder or his/her let person may place buy/sale execution methodicalness in the prescribed form, indicating whether, the order is a limit order i. e. an specifying the max. /min. rice at which he/she is willing to buy /sale, or at a market value i. e. without any limit of cost. The grease ones palms and sale orders are valid for septenaryer and ten age respectively, if not revalidated / off otherwise by the account operator. withdrawal method of Securities/Funds any or any amount of fund o r securities may be withdraw from an account subject to keeping of stripped-down credit balance of Tk. 5000. 00 in cash or in securities to keep the account running alive. Application against IPO All activities relating to application for securities and collection of allotment garner / refund indorsement and certificates, as the case may be, against the IPO8 are done by ICB on behalf of account holder.Collection of Securities and Benefits redress shares, bonus shares, dividends, interest, converted shares etc. accruing to an account are still by ICB from the respective companies. Registration and tutelary services Registration of shares/ securities with the company is made before the closure of the companys share / debenture stir book, after completing all the unavoidable formalities, on behalf of the account holder. five and other custodial arrangement for assets of the account are provided by ICB. advocate and data support In order to develop diversified and equilibri ze portfolio to minimize adventure and maximize profit, ICB provides professional advice to its clients.Data support in the form of securities analysis sheet, nonchalant grease ones palms/ sale position, statement and portfolio of each account, etc. are provided on demand and on tied(p) interval. Income Incomes from investments by vogue of dividend, interest, bonus shares, capital gains etc. are credited to the respective account. Expense Interest on loan (currently-12. 5%) and brokerage (0. 5% for non CDS & 0. 5250% for CDS) on sale/ purchase of securities are supercharged to the respective account. To encourage the small and medium savers, ICB at present does not charge fees for most of the services rendered by ICB to its customers, including fees for management, investment advice, custodial service(for non CDS securities),etc. stoppage of AccountAn account may be closed by written order subject to closing of fees & dues, if any. There is no provision of revivification o f a closed account. Risk Management Risks of investments in the securities market are lessen through circumspect & professional portfolio management. 2. 11 Organization Structure of ICB Management of ICB The head office of the corporation as per the requirement of the ordinance of ICB is set at Dhaka. The board of directors of ICB is very much rich as it consists of distinguished professional and managing director of other organization. The gore consists of 11 members including the head and Managing conductor. The mount up of managers consists of the following members. The Chairman and Managing film director (MD) are to be appointive by the government o The directors to be establish by the government from among persons portion under the government. o One Director to be appointed by the Bangladesh Bank o The Managing Director of Bangladesh Shilpa Bank (BSB), ex office. o The Managing Director of Bangladesh Shilpa Rin Shnagsta (BSRS) o Four other directors to be elected by the shareholders other than the government. ICB- its constituents and Departments Investment Corporation of Bangladesh split, into 25 departments and 11 divisions in its head office. Beside that ICB has seven branches in different districts. These are situated at Dhaka (local office), Chittagong, Sylhet, Rajshahi, Khulna, Bogura and Barisal. ICB is functionally shared out into two broad wings.One is operations wing and another is Administrative wing. The functions of operational wings entangle the activities of project Financing, homework look into and Business Development, Lunching social unit and Mutual Funds (launching if new funds is now stop and currently the function is accomplished by ICB Asset Management Ltd), transaction and criminal maintenance of Investor Accounts. The function of administrative Wing reckon the activities of Account and Finance, legitimate affairs, Implementation and convalescence, Project Implementation, law of nature and human race Issue. I t is mentioned earlier, that ICB consists of 11 Divisions and 25 departments. The following table lists all the divisions and departments of ICB.An appendix at the pf the report contains the full Organ gram of ICB. Table 2. 4 Division Department A. Administration 01. Personel 02. Establishment B. Loan Appraisal 03. Loan Appraisal 04. scotch and Business Research 05. Securities Analysis C. judicial Affairs 06. open Issue 07. Law D. Merchandising 08. Investors 09.Shares 10. proceeding E. Funds 11. unit sales 12. unit Registration and procurance 13. Mutual Funds F. Computer 14. formation Analysis 15.Programming 16. Management teaching System G. canvass And Methods 17. analyze And Methods (Head Office) 18. Audit And Methods ( separatees) H. Accounts and Finance 19. important Accounts 20.Project Loan Accounts I. Implementation 21. project Implementation 22. Recovery and Follow-up J. depositarys 23. Secretarys 24. earthly concern Rel ation K. Branch and Subsidiaries control Division 25.Branch nurse Department 2. 11 ICB Mutual Funds It is a know principle that diversification of investment reduces risk. An individual may not have the time, expertise and resources to undertake such diversification. Here arises the payoff of a Mutual Fund. Mutual Funds pool the savings of a great number of investors and make investments in a wide roll of securities. In Bangladesh ICB has pioneered Mutual Funds for the pursuit of investors and of the capital market. Mutual Funds are also cognise as close ended Mutual Funds. The issued capital of a Mutual Fund is limited, that is, a Mutual Fund offers a limited number of certificates for sale to the public.The amount of capital and the number of certificates of each Mutual Fund remains unchanged. ICB Mutual Funds are breaka mode of one another. outlay of Mutual Fund certificates after IPO is determined on the pains Exchanges through interaction of supply and demand. The market hurt of a Mutual Fund certificates is in stock(predicate) in Stock exchange quotations and in newspapers. An investor can purchase any of the existent eight ICB Mutual Funds certificates through the Stock Exchanges at the predominate Market determine. The Mutual Funds are managed by ICB as fund manager for which receives agency 1%. ICB Mutual Funds Certificates holders shall have unfettered self-command in the assets of the Fund to which they are related.In case of farting up of the Corporation the assets belonging to any ICB Mutual Fund shall not be interact as the assets of the Corporation. At present management fee 1% on the paying up capital of the Fund is charged annually. No amount is charged on account of custodial and trust services. The net income received on investments of Funds on account of dividend, bonus, interest, capital gain etc. are distributed amongst the Certificate Holders as per decision of the bill of fare of Directors of ICB. Board declares such income in the form of dividend at the end of July each year. Dividends declared by ICB in the past on the Mutual Funds were very attractive.A detail analysis on ICB sponsored mutual fund will be followed on the second part of the report. 2. 12 ICB social unit Fund Sponsored by the Government of Bangladesh, ICB building block Fund was established on April 10, 1981. Its main objective is to pull together savings through sale of its units to small investors and invest these funds in sellable securities. The scheme provides a potential source of equity and debt to industrial and commercial concerns and thus contributes to the industrial development of the country. social unit fund is an open ended Mutual Fund. It provides an opportunity to the unit holders to invest their funds in a well managed and diversified portfolio with a high degree of security of capital and reasonable p.a. returns.Investment in social units is safe and ensures a continuous and fixing source of in come for the holders. social units are easily encashable. As such, investment in Unit is comparatively more attractive. By investing in this scheme an investor may derive personalized benefit on the one hand and also contribute towards the economic development of the country on the other. ICB units are securities within the meaning of Trust Act. 1882. Issue, Transfer and stop of Unit Certificates (I) Units are available in 1, 5, 10, 50, 100, 500, 1000, & 5000 denominations. The names with addresses of the holders are recorded and dividends are dispatched to them accorded and dividends are dispatched to them accordingly. II) Units may be transferred through prescribed transfer form punctually filled in and signed by the transferor and transferee. No clay sculpture duty is required for such transfers. (III) Units may be enclose by way of surrendering the certificates along with the prescribed surrender forms duly filled in and signed by the registered holders and no front notic e is required. The certificates are required to be surrendered at the prevailing Repurchase Price. Price Fixation Changes in repurchase monetary values of units are notified through the newspapers and cost of a Unit is fixed sporadically by ICB as its fund manager. Among others, valuation of the assets of the Fund is taken into consideration while fixing price of a unit. Public ParticipationThe Fund is divided into units which are generally cognize as ICB Unit. Each Unit bears a accredited value in the assets of the Fund. The Unit holders are the owners of the fund and only they are benefited from it. Unit certificates can be purchased in single or joint name (s). At present maximum of 10,000 Units can be purchased in a single or joint name(S) at a time. Units are not interchange to institutions. Professional rede Professional Counseling is rendered to the prospective & existing investors who are anxious to purchase ICB Units through ICB offices and authorized Bank branches. Presently this scheme is operated by ICB Asset Management Company Limited. Investment by Bangladeshi Citizens foreignThe Bangladeshi citizens aliment abroad may invest in certificates on fulfillment of the following terms and conditions (I) The value of Units purchased is to be remitted through bank channel, (II) The money invested in Units and benefits thereon are not allowed to be repatriated, (III) The investors must mention their local and bank addresses in Bangladesh for appliance of registration of Units. Investment by Foreigners Residing in Bangladesh The foreign nationals residing in Bangladesh may also invest in Unit Certificates, provided they produce certificates to the effect that money being invested are their own savings and is not borrowed as loan or overdraft from any bank. These certificates are to be collected from a Gazetted Officer or a Banker not beneath the rank or Deputy General Manager. Fund ManagementThe tariff of managing the fund rests on ICB for whi ch management fee Tk. 1. 25 per Unit (net outstanding) is charged. The Corporation also discharges the responsibility of loading and drop off of securities in and from the portfolio in the interest of the Unit holders. It is also the custodian of all assets of the fund. Dividend The total income earned on investment/ deployment of funds, net of expenditures incurred, in a financial year is distributed among the unit holders as dividend. Dividend is normally declared at the end of July each year by the Board of Directors of ICB. Dividend Warrants are dispatched curtly after solvent of dividend.Since launching of the scheme in 1981 till FY 2004-05 the rates of yearbook dividend declared/ paid are as under Figure 2. 4 dividend performance of ICB unit fund The graph shows that the fund provides an attractive cash dividend each year to the highest of 25% in 1988-89 and to the lowest of 11. 01% in 2004-2005. Figure 2. 5 Dividend yield on ICB unit fund The graph shows a dividend yield on opening price of the unit fund. value Benefits (I) Investment in Units enjoys the benefit of Investment Allowance under Sec. 44 of Income evaluate ordinance 1984. (II) Units are treated as approved securities in accordance with the piece 2993 of the Companies Act. 1994 and Insurance Act, 1938. These are also treated as Securities as per Sec. 20 of the Trust Act, 1882. Cumulative Investment Plan (CIP) Under this scheme a holder kind of of receiving dividend may reinvest such dividend income accrued for purchasing Unit at a confessional rate. In such case, Units are issued at Tk. 1. 00 less than the opening price of the financial year. 2. 13 Development Activities of ICB justness support through consortium arrangement ICB inve