Stabilisation fund invests Tk 270cr to support ailing stock market

The Capital Market Stabilisation Fund (CMSF) has invested Tk 270 crore since its inception in 2021 with a view to supporting the ailing stock market. 

The fund has been invested through the Investment Corporation of Bangladesh, said Md Nojibur Rahman, chairman of the CMSF.

He shared the information during a speech at CMJF Talk organised by the Capital Market Journalists' Forum (CMJF) at the latter's office in the capital.

The Bangladesh Securities and Exchange Commission (BSEC) has formed the CMSF as a custodian of undistributed cash and stock dividends, non-refunded public subscription money and unallotted rights shares from the issuer of listed securities.

Cash and stocks in the fund are returned following claims by the shareholders or investors at any time in the indefinite perpetuity.

The move from the regulator came after it decided to use undistributed and unclaimed dividends of listed companies. It ordered listed companies to deposit their undistributed dividends to the fund.

Currently, the size of the fund is Tk 1,270 crore. Of the sum, Tk 560 crore came from undistributed cash dividends and Tk 710 crore in the form of stock dividends

Currently, the size of the fund is Tk 1,270 crore. Of the sum, Tk 560 crore came from undistributed cash dividends and Tk 710 crore in the form of stock dividends, said Rahman, also a former chairman of the National Board of Revenue.

The former principal secretary to the prime minister said many investors did not receive dividends properly in the past for several reasons. "About 1,200 investors have got back their dividends with the help of CMSF."

"The fund has given a boost to investors' confidence, so we are trying to enlarge the size of the fund."

In future, he said, the CMSF will provide dividend distribution services. "Currently, dividends are disbursed through banks. The BSEC is going to give us the task in the future."

According to Rahman, the stock market has the potential to grow, so people should get disappointed even if they do not get success immediately by investing in the market.

The BSEC has issued a directive, saying if a listed company fails to deposit undistributed dividends to the CMSF, it will be fined.

On top of that, the regulator announced recently that it will run special audits into companies to see whether they hold any undistributed dividends.

CMJF President Ziaur Rahman and General Secretary Abu Ali also spoke.