Institutional investors are increasing their investments in banks listed on the country’s capital market. Institutional investors have increased their investments in banks by about 67 per cent in September as compared to last August.
A review of the investment situation in August-September revealed such information.Analysts say special funds of banks for investing in the capital market, low interest rates on deposits, coordination of the capital market regulator Bangladesh Securities and Exchange Commission (BSEC) with the central bank have created an investment environment in the marketDone.Chayedur Rahman, president of the Bangladesh Merchant Bankers Association (BMBA), told Risingbd that the liquidity crisis that existed in the capital market is no more. The market has been having a positive impact since the central bank’s circular on setting up special funds for banks to invest in the capital market. Institutional investors are increasing their investment in the continuation of which. He hopes that investment will increase in the future.
It is learned that on February 10, Bangladesh Bank issued a circular stating that each scheduled bank will be able to form a special fund of maximum Tk 200 crore for investment in the capital market. As such, 59 Scheduled Banks have created new investment opportunities in the capital market in addition to the existing investment of a maximum of Tk 11,800 crore. As a result, institutional investment in various sectors, including capital market banks, has started to increase. Meanwhile, the regulatory body BSEC is working regularly to address the misuse of special funds in the capital market, whether there are any shortcomings in investment and to address them. As a result, the people concerned think that the investment in the market will be more dynamic.
Khairul Basar Abu Taher Mohammad, CEO of Mutual Trust Bank or MTB Capital Limited, told Risingbd that BSEC’s coordination with the central bank is an initiative by banks to increase investment in the capital market through their special fundsAs a result, institutional investors have the opportunity to increase their investment.Moreover, many are returning to invest in the capital market due to low interest rates on bank deposits. Besides, several steps have been taken to develop the market after the new commission headed by Professor Shibli Rubaiyat-ul-Islam took charge. This has created confidence of investors in the market. For these reasons, institutional investors have also been able to increase their investment.
According to the review, there are 30 banks listed in the capital market. Of these, institutional investors have increased their investment in 20 or about 67 percent of the banks. They have cut some investment from other banks.
Institutional investors have increased their investments in One Bank the most between August and September. Institutional investment in the company increased by 10.88 percent during the period under review. Institutional investment in One Bank stood at 28.53 percent last September. The previous month was 17.65 percent in August. Besides, Uttara Bank has increased the least investment. Institutional investment in the company has increased by 0.05 percent in one month. Investment in the company stood at 21.27 percent in September. It was 21.22 percent in August.
Institutional investors have also increased their investments in Al Arafah Islami Bank, Bank Asia, BRAC Bank, Citi Bank, Eastern Bank, Exim Bank, First Security Islami Bank, Jamuna Bank and Mercantile BankMutual Trust Bank (MTB), National Bank, NCC Bank, Premier Bank, Prime Bank, Rupali Bank, Shahjalal Islami Bank, South East Bank, Standard Bank Limited.
Meanwhile, the banks in which institutional investors have reduced their investments are Trust Bank, UCB, Social Islami Bank, Pubali Bank, ICB Islamic Bank, IFIC Bank, Islami Bank, AB Bank, Dhaka Bank, Dutch Bangla Bank Limited.
