BSEC forms probe bodies to look into 3 AMCs’ asset value

The Bangladesh Securities and Exchange Commission (BSEC), the securities regulator, has formed three separate probe committees to look into the exact amounts of the net asset value (NAV) of three asset management companies (AMCs).

The companies to be investigated are LR Global Bangladesh, Race Asset Management, and ICB Asset Management.

A three-member probe body would investigate ICB Asset Management’s funds, while two other five-member committees would inquire into the funds of LR Global Bangladesh and Race Asset Management, according to sources at the BSEC.

BSEC sources said the probe bodies formed to look into LR Global Bangladesh and Race Asset Management’s compliance would investigate whether the funds’ assets were shown properly and whether their income from investments came properly.

Each of the committees was asked to submit reports within 30 trading days.

The BSEC move came after growing criticism regarding UFS Asset Management’s fraudulence which allegedly embezzled Tk 158 crore from investors’ funds.

As per LankaBangla Securities, among the asset managers, RACE is the top asset manager in terms of assets under management (AUM) with an 48.36 per cent market share in the industry, followed by LR Global, VANGUARD, ICB AMCL, AIMS, SEML, CAPM, VIPB, and ATCP.

The contribution of Mutual Fund (MF) Assets to Bangladesh’s gross domestic product (GDP) is only 0.4 per cent, the lowest among the peer countries, indicating that the sector has the potential for exponential growth.

As on July 2022, the assets under management (AUM) of Bangladesh’s MF industry operated by 54 Asset Management Companies (AMCs) stood at $1.6 billion, according to IDLC, an investment bank.

On the other hand, the AUM of the Indian MF Industry operated by 43 AMCs was $472 billion during the same year, it said. AUM is the total market value of the investments that fund managers on behalf of clients.

Mutual Fund Assets to GDP ratio in Bangladesh is only 0.4 per cent which is 16.2 per cent in India, 54 per cent in Malaysia, 1.3 per cent in Pakistan, 28.3 per cent in Thailand, 6.6 per cent in Vietnam, 195.7 per cent in the US, and 180.8 per cent in Canada.

Out of the 37 MFs listed on the stock exchanges, most of the numbers were trading at discounts. The market capitalisation of 36 MFs stood at Tk 36.9 billion, while the AUM of the MF industry stood at Tk 58.3 billion.