Bar on investment by ICB in blue-chip firms lifted

The Bangladesh Securities and Exchange Commission (BSEC) has revoked restrictions on investment by the Investment Corporation of Bangladesh (ICB) in blue-chip companies to create demand for fundamentally strong companies.

The state-owned non-banking financial institution was previously allowed to invest not more than 5 per cent of the total number of shares of any blue-chip companies under the DS30 index of the Dhaka Stock Exchange.

“The decision was recently taken to create demand for fundamentally strong listed companies’ shares,” said BSEC spokesperson Mohammad Rezaul Karim on Thursday.

The blue-chip companies under the DS30 index are British American Tobacco Bangladesh Company, BBS Cables, Beacon Pharmaceuticals, Bangladesh Export Import Company, BRAC Bank, Bangladesh Submarine Cable Company, Bangladesh Steel Re-Rolling Mills, Beximco Pharmaceuticals, The City Bank, Delta Life Insurance, Eastern Bank, Fortune Shoes, Grameenphone, GPH Ispat, IDLC Finance, IFIC Bank, Islami Bank Bangladesh, LankaBangla Finance, LafargeHolcim Bangladesh, Meghna Petroleum, Olympic Industries, Orion Pharma, Power Grid Company, Renata, Robi, Singer Bangladesh, Square Pharmaceuticals, Summit Power, Titas Gas Transmission, and United Power Generation & Distribution Company Limited.

For DS30, a company must have a float-adjusted market capitalisation above Tk 50 crore and a minimum three-month average daily trade value of Tk 50 lakh as of the rebalancing reference date.

The state-owned lone financial institution recently comes into the spotlight because of its alleged investment in several fundamentally weak listed and non-listed companies.

The BSEC’s latest move is part of its series of measures to shore up the dwindling stock market.

On Wednesday, the BSEC asked four state-owned banks to make fresh investments in the capital market after forming special funds.

It also instructed Sonali, Janata, Rupali, and Agrani banks to furnish information about their portfolio investment status as early as possible to the securities regulator.

Earlier, the BSEC requested banks to inject fresh funds into the stock market for increasing institutional investor presence in the stock market.

On February 10, 2020, the Bangladesh Bank approved banks’ formation of a Tk 200 crore special fund to invest in the stock market, which will not be included in the calculation of the capital market exposure limit.

The fund will remain valid until February 2025, and the banks can take advantage of the loans until January 13, 2025.