operating system of icb unit fund

8/16/2019 Operating System of ICB Unit Fund

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An Internship Report

On

The Operating System of ICB Unit Fund

Submitted To

Sultan AhmedAssistant General Manager

Human Resource Management Department

Investment Corporation of Bangladesh

Supervised By

Nafia Laila

Assistant Professor

Department of Business Administration

Institute of Science and Technology

Submitted By

Shahriar Zaman

Examination Roll: 1172145

Registration No: 1177384

Session: 2010-2011

Major in Finance


Date of Submission: 19 April, 2016

INSTITUTE OF SCIENCE AND TECHNOLOGY

(Affiliated with National University of Bangladesh)


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LETTER OF TRANSMITTAL

Date: 19 April, 2016

Sultan Ahmed

Assistant General Manager

Human Resource Management Department

Investment Corporation of Bangladesh.

Subject: Submission of Internship Report on “The Operating System of ICB Unit

Fund”.

Dear Sir,

It is a matter of immense pleasure for me to submit my Internship Report on “The

Operating System of ICB Unit Fund” and for your kind evaluation. I am certain that the

knowledge and experience acquired while conducting the study will help me in many ways

in future.

I have tried my best to represent my ideas and findings as clearly as I could within the time

and resource available. I hope that the idea presented in the report will provide a clear

picture about ICB Unit Fund.

I have tried sincerely to comprehend and translate my knowledge in writing this report. I

enjoyed this project work and gladly attend any of you call to clarify on my point, if

necessary.

Sincerely Yours

…………………………

Shahriar Zaman

Exam Roll: 1172145


Major in Finance




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Student’s Declaration

I do hereby solemnly declare that the work presented in this Internship report has been

carried out by me and has not been previously submitted to any other University/ College/

Organization for an academic qualification/certificate/diploma or degree.

The work I have presented does not breach any existing copyright and no portion of this

report is copied from any work done earlier for a degree or otherwise.

I further undertake to indemnify the department against any loss or damage arising from

breach of the foregoing obligations.

.....................................

Shahriar Zaman

Examination Roll: 1172145


Session: 2010-2011

Major in Finance





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Supervisor’s Declaration

This is certified that Internship Report on “The Operating System of ICB Unit Fund” in

the bona fide record at the report is done by Shahriar Zaman, National University Roll No:

1172145, Registration No: 1177384, Academic session: 2010-11, Major in Finance is a

regular student of BBA program, Department of Business Administration, Institute of

Science and Technology under the National University of Bangladesh. He has completed an

internship program on “The Operating System of ICB Unit Fund” under my supervision

which is fulfillment of partial requirement of obtaining BBA degree.

I wish his success in all his future endeavors.

____________________Nafia Laila

Assistant Professor




Acknowledgement


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At the beginning I would like to express my deepest gratitude to my Almighty Allah for give

me the strength and the composure to complete the internship report. Words actually will

never be enough to express how grateful I am, but never the less I shall try my level best to

express my gratefulness towards some people.

I would like to thank my academic supervisor Nafia Laila, Assistant Professor, IST for her

motivation, inspiration, kind direction, valuable suggestions & advices during my internship

period and to prepare this report.

My thanks and gratitude to the authority of Investment Corporation of Bangladesh allows

me to complete my Internship program at their institution. I would like to thank Mr. SultanAhmed, Assistant General Manager, Human Resource Management Department, ICB for his

support, instruction, guidance and co-operation to do my internship successfully. I would

like to give my special thanks to Ms. Nuray Tasmin, Senior Officer; Mr. Torab Ahmed,

Senior Principal Officer; Joynal Hossain, Staff who gave special attention to me right from

the very beginning of my stay at ICB.

Although I face some difficulties while preparing this report but I enjoyed each and every

moment of working in ICB as an internee student. I express my sincere heartiest gratitude to

all the AGM, SPO, PO, SO and Staff of ICB Head Office, who helped directly and indirectly

in different capacities to conduct and complete the study.

I am grateful to my beloved parents, well wishers for their inspiration that lead me to go

ahead. Finally I like to thank all the persons who have directly or indirectly contributed in

preparing this report.

Executive Summary


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Investment Corporation of Bangladesh (ICB) was established in 1976 with the objectives of

accelerating industrialization and economic development of the country through

development of capital market by mobilizing savings and encouraging and improving the

investment climate in the country with particular emphasis placed on broadening the base

and scope of investments as well as attract investors. During 39 years of operation, ICB has

come forward as a responsible and trustworthy public sector institution. The report deals

with the product of ICB named ICB Unit Fund.

The establishment of ICB was challenging and excellent decision taken by the government,

which accelerates the pace of industrialization. On the other hand, develop well organized

and active capital market, primarily security market.

ICB has hold three subsidiary companies as on July 1, 2002. ICB has adopted this new line

of business policy for providing better management, better and quick customer services.

The objective of the study is to gather knowledge that how ICB floats and operating system

of ICB Unit Fund. The business of the ICB Unit Fund is to mobilize savings from investors

by way selling units and investing the funds in securities from the primary and secondary

markets to ensure maximum return for unit holders. It is invested in securities and money

market securities as a single account.

Acronyms


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ICB = Investment Corporation of Bangladesh

NRB = Non-Resident Bangladeshi

ICML = ICB Capital Management Ltd.

IAMCL = ICB Asset Management Company Ltd.

ISTCL = ICB Security Trading Company Ltd.

CIP = Cumulative Investment Policy

EPU = Earnings Per Unit

P/E Ratio = Price Earning Ratio

ROI = Return on Investment

Cr. = Crore

CMDP = Capital Market Development Program

SPO = Senior Principal Officer

PO = Principal Officer


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Table of Contents

Sl. No. Particulars Page No.

Letter of Transmittal I

Student’s Declaration II

Supervisor’s Declaration III

Acknowledgement IV

Executive Summary V

Acronyms VI

Chapter – One

Introduction

1.1 Background of The Study 1

1.2 Origin of The Study 1

1.3 Objective of the Study 1

1.4 Methodology 2

1.5 Limitations of the Study 3

Chapter – Two

Overview of ICB

2.1 Historical Background of ICB 5

2.2 ICB at a glance 5

2.3 Main Objectives of ICB 6

2.4 The functions of ICB 7

2.5 Business Policy of ICB 7

2.6 Vision and Mission of ICB 8

2.7 Management of ICB 8

2.8 Sources of Capital of ICB 9

2.9 Capital Structure of ICB 9

2.10 Share Details of ICB 10

2.11 Shareholding Position of ICB 11

2.12 Financial Performance of ICB 12


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2.13 Branches of ICB 12

2.14 Description of Products & Services of ICB 12

2.15 Subsidiaries of ICB 15

Charter – Three

ICB Unit Fund

3.1 Introduction of Unit Fund 18

3.2 Structure of Unit Fund 18

3.3 History of Unit Fund 18

3.4 Pricing System of Unit Fund 19

3.5 Inception of ICB Unit Fund 19

3.6 Objective of ICB Unit Fund 19

3.7 Price Fixation of ICB Unit Fund 20

3.8 Dividend Distribution Policy of ICB Unit Fund 20

3.9 Benefit of ICB Unit Fund 20

3.10 Other Relevant Information of ICB Unit Fund 21

Chapter – Four

Operating System of ICB Unit Fund

4.1 Management of ICB Unit Fund 22

4.2 Issue and Repurchase of Units 22

4.3 Position of Issued Units 23

4.4 Outstanding Units 24

4.5 Unit Price 24

4.6 Dividend and Interest Income 24

4.7 Capital Gain on Sale of Investments 25

4.8 Interest of Bank Deposits and Premium Income 25

4.9 Income, Expenditure and Distributable income 25

4.10 Dividend Declaration 25

4.11 Net Investment 26

4.12 Classification of Unit Holders of ICB Unit Fund 27


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Chapter – Five

Analytical Review of ICB Unit Fund

5.1 Qualitative Analysis of ICB Unit Fund 29

5.1.1 Strength 29

5.1.2 Weakness 30

5.1.3 Opportunity 30

5.1.4 Threat 31

5.2 Quantitative Analysis of ICB Unit Fund 31

5.2.1 Market Price Per Unit 31

5.2.2 Earnings Per Unit 32

5.2.3 Price Earning Ratio 33

5.2.4 Dividend Per Unit 35

5.2.5 Dividend Yield and Dividend Payout Ratio 35

5.2.6 Return On Investment 37

Chapter – Six

Findings, Recommendations and Conclusion6.1 Findings 39

6.2 Recommendations 40

6.3 Conclusion 41

Bibliography


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Chapter – One

Introduction


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1.1 Background of the Study

Internship means practical training through attending the particular work physically.

Practical training means a way through which a person or a trainee can gather

experience about the related subject practically and be able to apply his theoretical

experience in the field of real life. Practical training paves the way for gaining

practical knowledge through activities other than reading textbooks and attending

formal academic courses. Practical training is necessary to achieve complete

knowledge about something. Internship program is a form of practical knowledge. I

strongly believe that practical training can open the inner eyes of a man. The works

conducted during the internship program will expand the horizon of our practical

knowledge.

1.2 Origin of the Study

The internship program is an integral part of Bachelor of Business Administration

(BBA) program of National University, Bangladesh. As a student of BBA program in

National University, Bangladesh everyone has to submit a report after completion of

internship program. It is a three months program. I have been assigned to Investment

Corporation of Bangladesh to complete the internship program. I have prepared this

report on the basis of my three months practical working experience in ICB. The

report has been completed under the supervision of my academic supervisor Nafia

Laila, Assistant Professor, Department of Business Administration, IST and my

organizational supervisor Sultan Ahmed, Assistant General Manager, Human

Resource Management Department, ICB.

1.3 Objective of the Study

The objective of the internship program is to familiarize students with real business

situation, to compare with the business theories and at last stage make a report on

assign task.

Objectives regarding this study are as follows:


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1.3.1 Major Objectives

Following are the major objectives of the study:

The main objective of this report is to fulfill the requirements of BBA program

containing the completion of internship program and preparation of internship

report accordingly.

This report helps to get a clear idea about ICB and ICB Unit Fund.

1.3.2 Specific Objectives

Following are the specific objectives of the study:

To know the activities of the Investment Corporation of Bangladesh.

To know how ICB play an important role in the capital market

To gain an in-depth knowledge about the Unit Fund of ICB.

To obtain the knowledge about how the ICB Unit Funds are managed.

To understand the activities and contribution of Unit Funds in the capital

market.

To evaluate the performance of ICB Unit Fund.

1.4 Methodology

Methodology is the compulsory requirement for any types of research work. It

contains all the steps that are followed for preparing the study paper or report. Data

for the study were collected mainly from two sources:

Primary Sources

Secondary Sources

Both primary and secondary data sources are used in the analysis to take advantage of

the strengths of both types of data to minimize their respective weaknesses by

combining them.


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1.4.1 Sources and Methods of collecting Primary data

Briefing Session: Incase of corporate organization, this method is very useful.

During internship period I along with my group visited different departments

of ICB and took part briefing session. The head of departments gave briefs the

trainees which were very much useful for us and we gathered some valuable

information from their briefing.

By observation: This process is very useful for gathering primary data. This

process is very costly, time consuming. Through this process limited but

accurate data can be collected.

1.4.2 Sources and Methods of collecting Secondary data

The Secondary data had been collected with several relevant articles of the ICB.

These are given bellow:

Annual Report of ICB

Annual Report of ICB unit fund

ICB Website

ICB Ordinance

Monthly review of DSE & CSE

Materials & documents of ICB

Daily Newspapers, journals and books

1.5 Limitations of the Study

Although the internal environment of ICB was much better and the employees were

so much co-operative but like all other field, there were some limitations which I have

to face at the time of my internship and preparing the report. I have worked all the

departments of ICB one after another. But ICB is a large corporation and therefore 12

weeks internship program is too short to know the activities of ICB and prepare a


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comprehensive report on the Unit Fund of ICB. Some other limitations, I have faced

are as follows:

ICB doesn’t have own building so ICB has to maintain it’s department in

different buildings

Secrecy of the ICB Official's

Unavailability of relevant papers and documents

Insufficiency of necessary information

Employees of the ICB Head Office, Dhaka particularly those who deal with

Unit Fund as a few numbers and as a result they could not spend much time as

required

Internship program pattern was theoretical, so I could not gather practical

knowledge of everyday activities.


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Chapter – Two

Overview of ICB


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2.1 Historical Background of ICB

After liberation in view of socio-economic changes the scope for private sector

investment in the economy was kept limited by allowing investment in projects up toTk. 25 lacs. The new Investment Policy which was announced in July, 1974 provided

for an expanded role of private sector by allowing investment in a project up to Tk. 3

crores. This ceiling has further been raised to Tk. 10 crores. In spite of the adequate

facilities an incentives provided to the private sector, encouraging response was not

forthcoming. One of the reasons, among others, was the lack of institutional facilities

which provided underwriting support to industrial enterprises which was required to

raise the much needed equity fund. Thus the need for re-activation of capital

market/stock market was keenly felt. In the revised investment policy which was

announced in December, 1975.Government announced its decision to reactivate the

stock exchange and examine the question of re-creation of Investment Corporation of

Bangladesh. Accordingly, a committee of officials examined the matters and

recommended for recreation of ICB.

2.2 ICB at a glance

Investment Corporation of Bangladesh (ICB) is the only Government owned

investment banking financial institution. ICB was established on October 1, 1976

under “The Investment Corporation of Bangladesh Ordinance, 1976” (No. XL of

1976) to encourage and broaden the base of investments, develop the capital market

and mobilize savings. The establishment of ICB is a major step in a series of measures

undertaken by the government to accelerate the pace of industrialization and to

develop a well-organized and vibrant capital market. ICB caters to the need of

institutional support to meet equity gap of the industrial enterprise. In view of the

national policy of accelerating the rate of savings and investment to foster self-reliant

economy, ICB assumes an indispensible and pivotal role. Through the enactment of

the Investment Corporation of Bangladesh (Amendment) Act, 2000 (XXIV of 2000),

space of ICB's activities through the formation and operation of subsidiary companies

has been expanded.


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Name Investment Corporation of Bangladesh

Date of

Incorporation:

October 1, 1976.

Nature: Investment Banking Company

Related Law: Investment Corporation of Bangladesh Ordinance 1976

(No. XL 1976)

Authorized capital: Tk. 1000.00 Crore

Paid Up Capital: Tk. 632.81 Crore

Face value of Share: Tk. 10

Status: Corporation (Listed on the Stock Exchange).

Subsidiaries: ICB Asset Management Company Ltd. (AMCL)

ICB Capital Management Company Ltd. (CML)

ICB Security Trading Company Ltd. (STCL)

Table 2.1: ICB at a glance

2.3 Main Objectives of ICB

To encourage and broaden the base of investments.

To develop the capital market.

To mobilize savings.

To promote and establish subsidiary for business development.

To provide for matters ancillary thereto.


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2.4 The functions of ICB

Direct purchase of shares and debentures including placement and equity

participation

Participating in and financing of joint-venture companies

Providing lease finance singly and through syndication

Managing existing investment account

Managing Mutual funds and Unit funds

Managing Portfolios of existing shares

Conducting computer training programmers

Providing advance against ICB Unit and Mutual Fund certificate

To act as Trustee and Custodian

Providing Bank Guarantee

Providing Consumer Credit

Operating on the stock exchanges

Providing investment counseling to issuers and investors

Participating in and financing of joint venture projects

Dealing in other matters related to capital market operation

Introducing new business products suiting market demand

To supervise and control the activities of the subsidiary companies.

2.5 Business Policy of ICB

The Corporation has adopted a realistic business policy framework within which its

operation is conducted.

To act on commercial consideration with due regard to the interest of industry,

commerce, depositors, investors and to the public in general,

To provide financial assistance to projects subject to their economic and

commercial viability,

To arrange consortium of financial institutions including Merchant Banks to

provide equity support to projects,

To develop and encourage entrepreneurs,

To diversify investments,

To induce small and medium savers for investment in securities,


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To create employment opportunities,

To encourage investment in Agro-based and IT sectors.

2.6 Vision and Mission of ICB

2.6.1 Vision

Continue to be the leading, responsible and environment friendly financial institution

operating in such a way that fellow competitors and the society watch, acknowledge,

admire and emulate ICB as a successful and model organization in the industry.

2.6.2 Mission

Transforming Corporation into a responsible institution, a financial architect

and an innovative solution provider and performance leader.

Being a responsible institution created by law and act in accordance with the

mandates ICB's ordinance for fostering rapid growth of Bangladesh economy.

Being a financial architect and strive to establish a benchmark of values,

attitudes, behavior and commitments with earnest endeavors in generating

optimum profits and growth for our shareholders by efficient use of resources. Being an innovative solution provider and put emphasis on formulating total

solutions to foster mobilization of all domestic and NRB savings into potential

investments.

Being a performance leader and lead by example.

2.7 Management of ICB

The Head Office of the corporation as per the requirement of the ordinance of ICB islocated at Dhaka. The general direction and superintendence of the corporation

created in a board of directors, which consists of persons including the chairman and

managing director of ICB.

The board of directors consists of the following directors:

The Chairman of ICB to be appointed by the government,

The Managing Director of ICB to be appointed by the government,


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The Directors to be appointed by the government from among persons serving

under the government,

One Director to be nominated by the Bangladesh Bank,

The Managing Director, Bangladesh Development Bank Limited (Ex-officio),

Four other Directors to be elected by the shareholders as per ICB Act.

2.8 Sources of Capital of ICB

Every organization collects funds from several sources. It may be internal sources or

externals. In case of Investment Corporation of Bangladesh, it’s main sources of

capital is Paid-up Capital, Reserves, Retained profit. However, the corporation is

authorized to borrow fund from Government and other agencies including

International Agencies both in local and foreign currencies.

2.9 Capital Structure of ICB

Capital Structure as on 30 June, 2014 and 30 June, 2015:

Particulars 2015 2014 Increase/Decrease (%)

Paid-up Capital 632.81 421.88 49.99%

Reserves 1888.88 2035.09 -7.18%

Retained Profit 491.16 625.95 -21.53%

Total 3012.85 3082.92 -2.27%

Table 2.2: Capital structure


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16.3% 21.0%

Paid-Up capital

Reserve

Retained Profit

62.7%

Figure 2.1: Capital structure as on 30 June, 2015

2.10 Share Details of ICB

Particulars

Listing Year 1977

Market Category A

Electronic Share Yes

Face Value 10Tk

Current EPS 7.10Tk

Market Price 125.60Tk

Table 2.3: Share details


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2.11 Shareholding Position of ICB

Shareholding position as on 30 June, 2015 is given below:

Sl.

no.

Shareholders No. of

shareholders

No. of Shares Percentage of

shareholding

1. Government of the

People’s Republic of

Bangladesh

1 170859380 27.00

2. Development Financial

Institutions

2 162196110 25.63

3. State owned commercial

banks

4 143819220 22.73

4. State owned insurance

corporations

2 78187860 12.36

5. Denationalized Private

Commercial Banks

2 57586290 9.10

6. Private Commercial

Banks

6 462303 0.07

7. Mutual Funds 11 6226843 0.98

8. Other Institutions 243 2700686 0.43

9. General Public 4359 10773808 1.70

Total 4629 632812500 100.00

Table 2.4: Shareholding position of ICB


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2.12 Financial Performance of ICB

Financial performance in 2014-15 financial year of ICB is given below:

Particulars Result

Net Profit After Tax Tk. 406.73 cr.

Total Income Tk. 1044.19 cr.

Book Value per Share Tk. 61.13

Shareholders Equity Tk. 3856.61 cr.

Total Asset Tk. 10132.69 cr.

Dividend Payout Tk. 221.48

Dividend per Share 35% (proposed)

Table 2.5: Financial performance of ICB

2.13 Branches of ICB

a. Chittagong Branch

b. Rajshahi Branch

c. Khulna Branch

d. Barisal Branch

e. Sylhet Branch

f. Bogra Branch

g. Local Office

2.14 Description of Products & Services of ICB

2.14.1 Advance against Equity, Private Equity, Placement of Shares

As part of business diversification and encouraging rapid industrialization of the

country, the scheme for advance against equity, private equity participation &

placement of shares etc. have been introduced since inception of the Corporation. ICB


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invests in different companies through equity participation either singly or under

consortium arrangements of different banks and financial institutions.

2.14.2 Advance against ICB Unit Fund, Bangladesh Fund Certificates etc

Advance against ICB Unit certificate scheme was introduced in 1998 for the ICB Unit

holders to meet their emergency fund requirements. Presently ICB provides advance

against the certificates of ICB Unit Fund, Bangladesh Fund, ICB AMCL Pension

holders Unit Fund and ICB AMCL Unit Fund. One can borrow maximum 80.0

percent of initial surrender value by depositing his/her unit certificates under lien

arrangement from any of the ICB offices and authorized banks.

2.14.3 Managing Margin Loan Accounts, Unit and Mutual Funds

Investment account holders can avail margin loan facilities to purchase securities

from both primary and secondary markets as per SEC margin rules. Margin loan is

provided for purchasing securities with sound fundamentals and good prospects so as

to reduce risk of investment to protect the interest of the investors.

2.14.4 ICB Unit Fund

It is an open-end mutual fund scheme launched in April 1981, through which the

small and medium savers get opportunity to invest their savings in a balanced and

relatively low risk portfolio. ICB has so far declared attractive dividends on units

every year ranging from the lowest Tk. 11.5 to the highest Tk. 42.50 per unit.

Investments in units enjoy tax benefits, amount being applicable as per law.

2.14.5 ICB Mutual Funds

ICB has so far floated eight closed-end mutual funds. The First ICB Mutual Fund was

floated on 25 April 1980, while the Eighth ICB Mutual Fund was floated on 23 July

1996. The aggregate size of these funds is Tk. 17.75 crore. As on 30 June 2015,

18517 certificate holders owned these funds. ICB Mutual Funds have declared

lucrative dividend ranging from 120% to 1000% for the year ended 30 June 2015.

Investors show overwhelming interest in all the ICB Mutual Funds. New mutual

funds are now being floated through "ICB Asset Management Company Ltd."- a

subsidiary of ICB after corporate restructuring.


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2.14.6 Mergers & Acquisition

Companies willing to expand their business through mergers or acquisitions or to

divest projects that no longer fit into present scale of operation contact the

Corporation. ICB provides professional advisory services in respect of shaping up the

cost and financial structures to ensure best possible operational results.

2.14.7 Trustee & Custodian Activities

ICB is acting as trustee to the debenture issues and securitized bonds. Up to 30 June

2015 ICB has acted as trustee to the debenture issues of 17 companies involving Tk.

184.15 crore and issues of 19 bonds of 16 companies involving Tk. 2369.36 crore.

ICB has also undertaken the responsibilities of trustee to 26 closed-end mutual funds

involving Tk. 2525.75 crore and 6 open-end mutual funds involving Tk. 180.00 crore

upto 30 June 2015.

2.14.8 Portfolio Management

Being the largest institutional investor, ICB contributes significantly to the

development of the country's capital market through active portfolio management

which is one of the important functions of ICB. There are altogether eleven portfolios

which are being managed by ICB- eight of them are mutual funds, two are ICBs own

portfolio and the rest one is unit fund portfolio.

2.14.9 Lease Financing

ICB provides lease finance mainly for procurement of capital machinery, equipment

and transport to the prospective companies. The period of lease, rentals, charges and

other terms and conditions are determined on the basis of assets and assistance

provided as per requirement of the lessee.

2.14.10 Fixed Deposit Receipt (FDR)

Providing a tailored solution is the essence of our services. ICB recognizes that a

customized solution like FDR is vital for the success of the business. Whether it is a

Project Finance or Term Loan, ICB offers the right solution from where applicants


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find top-class skills and in-depth knowledge of market trends from our specialists -

altogether a gratifying experience.

2.14.11 Issuing Bank Guarantee

ICB has introduced the Bank Guarantee scheme in 2002-03. ICB provides (i) Bid

bond guarantee for enabling the business people to participate in any tender or

bidding; (ii) Performance bond guarantee for helping the business community to

continue their business smoothly by fulfilling their obligations promised by them to

their clients; (iii) Customs guarantee for solving different disagreements between the

customs authority and the business classes at the initial stage. The limit of guarantee

is issued against at least 20.00 per cent cash and 80.00 per cent easily en-cashable

securities or against 100.00 per cent cash margin.

2.14.12 Corporate Financial Advice

ICB and its subsidiary company ICB Capital management Limited provide

professional & financial advices on corporate restructuring & reengineering to

companies of Govt. enterprise those who are intently to offload shares in the Capital

market.

2.15 Subsidiaries of ICB

2.15.1 ICB Capital Management Ltd. (ICML)

ICB Capital Management Ltd. is a fully owned subsidiary of Investment Corporation

of Bangladesh. The company obtained license from the Securities and ExchangeCommission to act as Issue Manager, Underwriter and Portfolio Manager and to carry

out other merchant banking operations under the Securities and Exchange

Commission (Merchant Banker and Portfolio Manager) Regulations, 1996. The

company was incorporated under the Companies Act, 1994 on 5 December 2000 and

obtained registration from the Securities & Exchange Commission on 16 October

2001. The company started its' operation from 01 July, 2002 upon issuance of gazette

notification by the government. The Company has a separate Board of Directors

comprising 3 members from the private sector having good academic qualification,


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expertise and experience in the field of business, finance and investment. The

Managing Director of ICB is the Chairman of the Board. The company has excellent

working environment being equipped with logistics and computer facilities.

2.15.2 ICB Asset Management Company Ltd. (IAMCL)

ICB Asset Management Company Ltd. a subsidiary of Investment Corporation of

Bangladesh (ICB) commenced its journey on 5th December, 2000 with the objective

of professionally managing investment funds. The Company offers different types of

investment schemes where savings are pooled for investment in the capital market.

These schemes are designed to hand out best possible benefits to the investors at the

lowest possible risk. Investment in the securities market, for that matter any

investment, carries risk. But there are many techniques to reduce such risk. The

Company is managed by a group of experts who have the necessary skills, knowledge

and aptitude not only to handle risk but also to ensure optimum return taking into

consideration the environment prevailing in the market. ICB Asset Management

Company Ltd., are in a unique position to handle risk-return profile of an investment

efficiently and prudently. It is now managing fifteen funds - ten close-ends Mutual

Fund and five open-end Mutual Funds known as Unit Fund. Some more new funds

are in the offing. The company is engaged in investment management; more

specifically floating and managing both open-end and closed end mutual funds. The

company is dedicated towards development of mutual fund industry as well as the

capital market of Bangladesh.

2.15.3 ICB Securities Trading Company Ltd. (ISTCL)

ICB Securities Trading Company Limited (ISTCL) was formed as a subsidiary

company of Investment Corporation of Bangladesh (ICB) in the year 2000 to perform

stock brokerage functions, as part of the restructuring program of ICB under the

Capital Market Development Program (CMDP) initiated by the Government of

Bangladesh (GOB) and the Asian Development Bank (ADB). The Company is being

operated pursuant to its own Memorandum and Articles of Association, BSEC's rules

and regulations and other applicable laws. It has independent Board of Directors and

separate management. The Company emerged as a public sector stock broking

company just after the introduction of Automated Trading System in the country. The


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Transaction Department of ICB turned into ISTCL adopting electronic trading system

and upgraded technologies in delivering services. The Company started brokerage

activities in Dhaka Stock Exchange Limited (DSE) and Chittagong Stock Exchange

Limited (CSE) after having licenses from Bangladesh Securities and Exchange

Commission (BSEC) on 13 August 2002 and 07 February 2004 respectively. The

Company started its Stock Dealer function from 15 February 2010. The Company

offers stock brokerage services for its diverse clients through the extended network of

head office and 07 (seven) branch offices in major important cities of the country.

These services are made available by a highly dedicated workforce of 118 employees

through 58 trading terminals, one of the largest networks in Bangladesh. ISTCL has

passed 13 years of its voyage in providing full-fledged standard brokerage services

and thus it has become the country's leading stock brokerage service provider and

gained trust and reliability of both the individual and institutional investors.


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Chapter – Three

ICB Unit Fund


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3.1 Introduction of Unit Fund

Unit Funds are portfolios of assets such as equities, bonds, cash and listed property, in

which investors can buy units. This allow to investors to spread their risk, whilst

getting the benefits of professional fund management.

Unit Funds are open-ended investments, meaning that unlike investment funds there is

not a finite number of units in issue and these can increase or decrease dependent

upon the net sales and repurchase by existing unit holders. These units are managed

within what is known as the "Managers Box". The Box Manager of the fund will

make a decision at each valuation point whether or not to Create (add) or to Liquidate

(remove) units based on the final net sales and redemptions prior to the next valuation

point where the Fund is priced on a "Forward Basis", or at the actual valuation point

where the fund is priced on an Historic basis.

The underlying value of the assets is always directly represented by the total number

of units issued multiplied by the unit price less the transaction or management fee

charged and any other associated costs. Each fund has a specified investment

objective to determine the management aims and limitations.

3.2 Structure of Unit Fund

The fund manager runs the fund for profit.

The trustees ensure the fund manager keeps to the fund's investment

objective and safeguards the fund assets.

The unit holders have the rights to the fund assets.

The distributors allow the unit holders to transact in the fund manager's unit

funds. The registrars are usually engaged by the fund manager and generally act as a

middleman between the fund manager and various other stakeholders.

3.3 History of Unit Fund

The first Unit Fund was launched in the UK in 1931 by M&G under the inspiration

of Ian Fairbairn. The rationale behind the launch was to emulate the comparative

robustness of US mutual funds through the 1929 Wall Street crash. The first fund


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called the “First British Fixed Trust” held the shares of 24 leading companies in a

fixed portfolio that was not changed for the fixed lifespan of 20 years. The trust was

re-launched as the M&G General Trust and later renamed as the Blue Chip Fund. By

1939 there were around 100 trusts in the UK, managing funds in the region of £80

million.

3.4 Pricing System of Unit Fund

Unit funds are priced per unit on a forwarding pricing basis. This means that when a

person buy or sell units he or she do so at the closing price of that day. Price changes

daily and is determined by the net asset value (NAV) of the portfolio’s underlying

investments.

3.4.1 Volatility

Volatility refers that price of a unit fund fluctuates over a certain period therefore, it’s

risk. Funds with a higher volatility usually offer higher returns than low volatility

fund. Returns may fluctuate over short time periods and investors need to know what

their time horizon is when choosing a fund.

3.5 Inception of ICB Unit Fund

With the approval of the Govt. of Bangladesh, ICB Unit Fund was formed in April,

1981 by the Investment Corporation of Bangladesh under section 21 (2) of the

Investment Corporation of Bangladesh Ordinance, 1976 and ICB Unit Regulations,

1981.

ICB 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 yearly returns.

3.6 Objective of ICB Unit Fund

The main objective of ICB Unit Fund is to mobilize savings through sale of its units

to small investors and invest these funds in marketable securities. This scheme

provides a potential source of equity and debt to industrial and commercial concerns

and thus contributes to the industrial development of the country.


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3.7 Price Fixation of ICB Unit Fund

The repurchase price of unit is fixed in the regular meeting of the Unit Price Fixation

Committee. For the fixation of unit price asset value of fund is considered among

others. Information regarding change of unit price is published in well-known national

daily newspaper, website and notice board of ICB.

3.8 Dividend Distribution Policy of ICB Unit Fund

At least 70% of the annual profit is declared by board of directors of ICB as dividend

according to the Securities and Exchange Commission (Mutual Funds) Rules, 2001.

Dividend Warrants are dispatched after declaration of dividend.

3.9 Benefit of ICB Unit Fund

ICB unit holders can enjoy the following benefits:

The re-purchase price of ICB Unit is re-fixed as per the latest NAV (Net

Asset Value) according to the Mutual Fund Rules. The repurchase price of

ICB Unit change with the movement of Asset value of Unit Fund. This

facilitates the unit holders to withdraw their investment at a rational price atany time.

The re-purchase price, net asset value and other price sensitive information

are regularly published in the website and national daily news paper. As a

result the investors can get necessary information easily.

At least 70% of the annual profit is declared by board of directors of ICB as

dividend according to the Securities and Exchange Commission (Mutual

Fund) Rules, 2001. This confirms the regular dividend.

The unit holders can avail temporary loan against lien of unit certificates

from ICB and other bank/financial institutions.

Unit holder can nominate somebody.

Unit holders can enjoy Investment Allowance as per Para 44(2) of the Income

tax Ordinance 1984.

All income of the ICB Unit Fund is tax-free.

Dividend declared by ICB Unit Fund upto a limit (at present Tk.25,000) is

tax-free.


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3.10 Other Relevant Information of ICB Unit Fund

In case of non receipt or lost dividend warrants duplicate dividend warrant is

issued after observing necessary formalities.

Unit holders should immediately communicate any change of address to the

issuing offices so that no problem arises in dispatching dividends and

surrendering the certificates.

Units can be en-cashed at the prevailing Repurchase Price by submitting the

prescribed surrender forms duly filled in and signed by the registered holders

and no prior notice is required.

Daily transactions are being held during banking hours except Thursday,

holidays and in the month of July each year.


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Chapter – Four

Operating System of ICB Unit Fund


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4.1 Management of ICB Unit Fund

The overall responsibility of managing ICB Unit Fund rests on Investment

Corporation of Bangladesh.

4.2 Issue and Repurchase of Units

In terms of power conferred in the ICB Ordinance, under the Capital Market

Development Program (CMDP) initiated by the Govt. of Bangladesh and the Asian

Development Bank, ICB Asset Management Company Ltd.-a subsidiary of ICB has

been formed which started its functions from 1 July, 2002. Subsequently ICB stopped

selling of Unit certificates (except under CIP) from the same date.

During 2014-15, 6384257 Units of Tk. 127.69 crore were issued under the

Cumulative Investment Plan (CIP) while 700428 Units of Tk. 15.54 crore were

repurchased. The following graph shows a comparative position of gross issue (CIP),

repurchase and net issue of units for the periods from 2010-11 to 2014-15:

(Tk. in Cr.)

140

120

100

80

60 52.36

68.63

55.48

79.99

59.28

101.57

85.56

127.69

112.15

38.4240

20 13.94 13.1520.71

16.01 15.54

0

2010-11 2011-12 2012-13 2013-14 2014-15

Gross Issue/CIP Repurchase Net Issue

Figure 4.1: Gross issue (CIP), repurchase and net issue of units of ICB Unit

Fund


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4.3 Position of Issued Units

A position of gross issue of Units under Cumulative Investment Plan (CIP) through

ICB and other institutions during 2014-15 is given below:

SL.

No

Name of Institution No. of Units Issued Percentage

1. Investment Corporation of

Bangladesh

5188458 81.27

2. IFIC Bank Limited 439946 6.89

3. Sonali Bank Limited 263285 4.12

4. Agrani Bank Limited 163788 2.57

5. United Commercial Bank

Limited

156242 2.45

6. Uttara Bank Limited 51196 0.80

7. Eastern Bank Limited 38949 0.61

8. City Bank Limited 23482 0.37

9. Janata Bank Limited 18305 0.29

10. Rupali Bank Limited 16002 0.25

11. Bangladesh Krishi Bank 14868 0.23

12. Dhaka Bank Limited 9480 0.15

13. Prime Bank Limited 256 0.004

6384256 100.00

Table 4.1: Position of Units issued under CIP through ICB and other institutions


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From the above Table 4.1, It is observed that in 2014-15 under CIP the highest 81.27

percent units were issued through the offices of ICB followed by 6.89 per cent and

4.12 per cent through IFIC Bank Ltd. and Sonali Bank Ltd. respectively.

4.4 Outstanding Units

The total number and value of units outstanding as on 30 June, 2015 was 62771858

units and Tk. 838.45 crore respectively. A comparative position of outstanding units

of ICB unit Fund for the periods from 2010-11 to 2014-15 is given below:

6.50

6.00

5.50

5.00Number Of unit in crore

4.50

4.00

3.50

2010-11 2011-12 2012-13 2013-14 2014-15

Figure 4.2: Number of outstanding units of ICB Unit Fund

4.5 Unit Price

On 1 August 2014, when the transactions of Units resumed the opening issue/CIP and

repurchase prices of each Unit were fixed at Tk. 204.00 and Tk. 200.00 respectively.

The closing repurchase price was Tk.255.00 as on 30 June, 2015.

4.6 Dividend and Interest Income

In 2014-15 the Fund has earned an amount of Tk. 102.72 crore as dividend from 171

companies and interest on debenture securities of Tk. 6.97 crore resulting in total


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dividend and interest income of Tk. 109.69 crore which is 6.37% higher than the

previous year. The total dividend and interest income during 2013-14 was Tk. 103.12

crore.

4.7 Capital Gain on Sale of Investments

During 2014-15 the Fund has earned an amount of Tk. 299.75 crore as capital gains

by selling securities of 25 companies compared to Tk. 272.98 crore earned in 2013-14

by selling securities of 54 companies.

4.8 Interest of Bank Deposits and Premium Income

In 2014-15 the Fund has earned Tk. 15.72 crore as interest on bank deposits whichwas Tk. 9.17 crore in 2013-14.

In 2014-15, the Fund has earned Tk. 2.55 crore as premium on total issued Units as

against Tk. 2.26 crore in 2013-14.

4.9 Income, Expenditure and Distributable income

During the year under review, the Fund has earned a total income of Tk. 429.19 crore

by way of dividend, interest on debenture securities, capital gain, interest on bank

deposits, premium on issue of units and others. After deducting the total expenses of

Tk. 67.32 crore on account of management fee, custodian fee, commission and

brokerage, audit fee, postage, Bank charges, provision against investments and others

the fund had a net income of Tk. 361.87 crore. Together with the previous year's

undistributed income of Tk. 369.70 crore, the Fund had a net distributable income of

Tk. 731.58 crore. The distributable income per certificate stood at Tk. 116.55. The

Fund had 62771858 outstanding Units as on 30 June, 2015.

4.10 Dividend Declaration

266.78 crore for 2014-15 in the meeting held on 30 July, 2015. The unit holders

whose names The Board of Directors of ICB declared dividend at the rate of Tk.

42.50 per unit payout of Tk. appeared in the register on 30 June, 2015 were entitled to

this dividend. The rest amount of Tk. 464.80 crore would be retained in the fund's


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account. The following table shows dividend performance of ICB Unit Fund for the

periods from 2005-06 to 2014-15:

Financial Year Dividend Per Unit (Tk.)

2005-06 12.00

2006-07 13.00

2007-08 20.00

2008-09 22.00

2009-10 26.00

2010-11 30.00

2011-12 32.00

2012-13 36.50

2013-14 40.00

2014-15 42.50

Table 4.2: Dividend per unit of ICB Unit Fund

4.11 Net Investment

The net investment of ICB Unit Fund stood at Tk. 1863.46 crore as on 30 June, 2015

which market value was Tk. 4017.79 crore. The ex-dividend Net Asset Value (at

market price) was Tk. 550.95 per unit as on 30 June, 2015.


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4.12 Classification of Unit Holders of ICB Unit Fund

As on 30 June, 2015 the numbers of unit holders was 29360. The occupation-wise

classification of unit holders of ICB Unit Fund is given below:

Sl. no Occupation / Institution No. of Unit

Holders

Percentage

1. Public and private sector

employees

16872 57.48

2. Retired persons 1779 6.06

3. Engineers, doctors, lawyers etc. 1930 6.57

4. Businessmen and agriculturists 842 2.87

5. Defense personnel 1302 4.43

6. House-wives 1470 5.01

7. Workers and students 2064 7.03

8. Bangladeshis residing abroad 1810 6.16

9. Institutional provident fund 36 0.12

10. Others 1255 4.27

Total 29360 100.00

Table 4.3: Occupation-wise classification of unit holders of ICB Unit Fund


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7.03%

5.01%

4.43%

2.87%

6.57%

4.27%

0.12%6.16%

57.48%

Public and private sector

employees

Retired presons

Engineers, doctors, lawyers

etc

Businessmen and

agriculturists

Defense personnel

House-wives

Workers and students

Bangladeshis residing

6.06% abroad

Institutional provident fund

Others

Figure 4.3: Percentage of unit holders of ICB Unit Fund

From the above Figure 4.3, It may be noticed that out of the total unit holders of ICB

Unit Fund as on 30 June, 2015, Public and private sector employees accounted for

maximum of 57.48% who are mainly of small and medium size income group. It

represents that ICB Unit Fund has succeed to attract small and medium savers.


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Chapter – Five

Analytical Review of ICB Unit Fund


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There are two types of analysis. They are:

Qualitative Analysis

Quantitative Analysis

5.1 Qualitative Analysis of ICB Unit Fund

SWOT analysis has been done in the qualitative analysis of ICB Unit Fund.

5.1.1 Strength

Strength is the internal factor of SWOT analysis. ICB Unit Fund Department has

some strength which are must more attractive for every investor. As a result investors

are investing their money in the ICB Unit Fund. The ICB Unit Fund strength is given

below:

ICB Unit Fund more popular for investors, because every year authority

declared handsome dividend for unit holders.

SWOT

Strength Weakness

ThreatOpportunity


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Higher job satisfaction exists among the employer and employee. Not engaged

in unfair business practice. As a result investors are investing money in the

ICB Unit more safely

Good co-operation among the officers and executives in the ICB Unit Fund

Department.

Risk less investment because ICB Unit Fund authority every year declared

handsome dividend.

ICB Unit Fund investment processes comparatively easy another institution

Chittagong Stock Exchange.

Loan facilities are available.

Good consumer relationship.

Cumulative Investment Plan (CIP) attractive for every category investors.

5.1.2 Weakness

Weakness is the internal factor of SWOT analysis. In the world everything is not good

enough. So, everything has weakness. In that's reasons ICB Unit Fund have some

weakness which weakness are not favorable for investors. Weaknesses are as follows:

Loan facilities are not sufficient for investors.

Most of officers are not business graduate and not highly qualified.

There is information gap between head office Unit Fund Department and

Chittagong Branch office.

Absence of sufficient computer facilities.

Reluctant to Advertisement campaign.

5.1.3 Opportunity

Opportunity is the external factor of SWOT analysis. Opportunities of ICB Unit Fund

are given below:

Can increase loan facilities.

ICB Unit Fund more reliable to local public (investors).

Govt. has taken steps to develop capital market.


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5.1.4 Threat

Threat is the external factor of SWOT analysis. There are some threats of ICB Unit

Fund. They are:

There are many competitors in the market.

Different classic service of competitors.

Young energetic, dynamic, talent and smart work force of competitors.

To morons business word is for knowledge organization.

Fund constant in financing for modem technologies.

Shortage of updated expertise.

5.2 Quantitative Analysis of ICB Unit Fund

Some Financial ratio analysis has been done in quantitative analysis of ICB unit fund.

5.2.1 Market Price Per Unit

Market price per unit refers to the price in which a unit can be purchased. In case of

ICB Unit Fund, there are mainly two types of prices. First one is issue price and other

one is repurchase price. In following figure, issue price is given because mass peoplebuy unit at this price.

250

200

150 159170

180 184

204

100

Market Price Per Unit

50

0

2010-11 2011-12 2012-13 2013-14 2014-15

Figure 5.1: Market price per unit of ICB Unit Fund


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The above figure shows the market price per unit of ICB Unit Fund for the periods

from 2010-11 to 2014-15. The figure represents that the market price of ICB Unit

Fund is increasing year by year.

5.2.2 Earnings Per Unit

Earning per unit is the amount of earning that is earned into each unit of ICB Unit

Fund. The calculation of earnings per unit for the periods from 2010-11 to 2014-15 is

given below:

Financial

Year

Net Income (1)

(Tk. in Cr.)

No. of Units

Outstanding (2)

(Units in Cr.)

Earnings Per

Unit (3)

(1) ÷ (2) = (3)

2010-11 180.59 4.54492 39.73

2011-12 196.37 4.87698 40.26

2012-13 269.99 5.22429 51.68

2013-14 304.60 5.50880 55.29

2014-15 361.87 6.27719 57.65

Table 5.1: Earnings per unit of ICB Unit Fund

EPU reflects the earnings which a unit holder can get to hold a unit. Earning per unit

of ICB Unit Fund is increasing at a good rate. To make a clear look of earnings per

unit is given in the following figure:


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70

60

50 51.68

55.29 57.65

40 39.73 40.26

30Earnings Per Unit

20

10

02010-11 2011-12 2012-13 2013-14 2014-15

Figure 5.2: Earnings per unit of ICB Unit Fund

From the above figure, It is easily noticed that the EPU line is up-warding and it is a

good sign because it represents that EPU of ICB Unit Fund is increasing in every year

at a good rate. EPU is calculated for the last five years. In 2010-11, EPU is Tk. 39.73

and in 2014-15, EPU is Tk. 57.65. So within five years of time span, EPU of ICB Unit

Fund has been grown near about 45% and it is a remarkable sign.

5.2.3 Price Earning Ratio

Price earning ratio is basically the amount unit holders are willing to pay for a unit,

relative to its earnings. Price earning ratio is also known as P/E ratio. P/E ratio reflects

the earnings potential of a company in the eyes of investors.

A high P/E ratio indicates company has good growth prospects that it will make more

profit in the future and a low P/E ratio indicates that unit holders get more earnings

against their investment.

Market price per unit and Earnings per unit both are used to calculate P/E ratio of ICB

Unit Fund. The calculation of P/E ratio for the periods from 2010-11 to 2014-15 is

given below:


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Financial

Year

Market Price Per Unit

(1)

Earnings Per Unit

(2)

P/E Ratio (3)

(1) ÷ (2) = (3)

2010-11 159 39.73 4.00

2011-12 170 40.26 4.22

2012-13 180 51.68 3.48

2013-14 184 55.29 3.33

2014-15 204 57.65 3.54

Table 5.2: Price earning ratio of ICB Unit Fund

In the above table, we get P/E ratio for the last five years. Now P/E ratio is presented

in the following figure to make a better view:

4.5

4 4

3.5

3

4.22

3.483.33

3.54

2.5

2

1.5

P/E Ratio

1

0.5

0

2010-11 2011-12 2012-13 2013-14 2014-15

Figure 5.3: P/E ratio of ICB Unit Fund

From the above graph, it is noticed that there has been a little fluctuation in the P/E

ratio of ICB Unit Fund. The highest P/E ratio was in 2010-11 and P/E ratio line is

down-warding.


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5.2.4 Dividend Per Unit

Last five year’s dividend per unit of ICB Unit Fund is given in the following figure:

45

40

35

3230 30

40

36.5

42.5

25

Dividend Per Unit20

15

10

5

0

2010-11 2011-12 2012-13 2013-14 2014-15

Figure 5.4: Dividend per unit of ICB Unit Fund

In every year dividend per unit is increasing of the ICB Unit Fund. Above figure

shows ICB Unit Fund’s dividend per unit line is up-warding year by year at a good

rate.

5.2.5 Dividend Yield and Dividend Payout Ratio

Dividend yield indicates how much ICB Unit Fund pays out to its unit holders as

dividends each year relative to its unit market price.

Dividend payout ratio indicates the percentage of ICB Unit Fund’s earnings paid out

to unit holders as cash dividend each year.

Dividend yield and dividend payout ratio of ICB Unit Fund for the periods from

2010-11 to 2014-15 is given in the following table:


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Financial

Year

Dividend

Per

Unit (1)

Market

Price Per

Unit (2)

Dividend

Yield (3)

(1)÷(2) = (3)

Earnings

Per

Unit (4)

Dividend

Payout (5)

(1)÷(4) = (5)

2010-11 30 159 18.87% 39.73 75.51%

2011-12 32 170 18.82% 40.26 79.48%

2012-13 36.50 180 20.28% 51.68 70.63%

2013-14 40 184 21.74% 55.29 72.34%

2014-15 42.50 204 20.83% 57.65 73.72%

Table 5.3: Dividend yield & Dividend payout ratio of ICB Unit Fund

Dividend yield and Dividend payout ratio of ICB Unit Fund is given in the following

figure:

100.00%

90.00%

80.00%

70.00%75.51%

79.48%

70.63% 72.34% 73.72%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

18.87% 18.80% 20.28% 21.74% 20.83%

Dividend

Yield

Dividend

Payout

0.00%

2010-11 2011-12 2012-13 2013-14 2014-15

Figure 5.5: Dividend yield and Dividend payout ratio of ICB Unit Fund


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From the above figure it is noticed that Dividend payout ratio is down trend which

means company use much of its earning to reinvest in the company. On the other

Dividend yield is little bit up-warding which means company is attempting to attract

the investors for investing in ICB Unit Fund.

5.2.6 Return On Investment

ROI of ICB Unit Fund for the periods from 2010-11 to 2014-15 is given below:

Financial Year Net Income (1) Total Investment (2) ROI (3)

(1) ÷(2) = (3)

2010-11 180.59 1190.13 15.17%

2011-12 196.37 1277.18 15.37%

2012-13 269.99 1532.21 17.62%

2013-14 304.60 1667.55 18.27%

2014-15 361.87 1863.46 19.42%

Table 5.4: ROI of ICB Unit Fund

ROI represents the return of an investment relative to its investment.

25.00%

20.00%

15.00%

10.00%

15.17% 15.37%

17.62% 18.27%

19.42%

ROI

5.00%

0.00%

201-11 2011-12 2012-13 2013-14 2014-15

Figure 5.6: ROI of ICB Uit Fund


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Above figure shows the calculation of ROI of Investment Corporation of Bangladesh.

A high ROI means the investment gains comparatively favorable to investment cost.

Last Five years ROI of ICB Unit Fund is given. Every year ROI of ICB Unit Fund is

increasing. ROI line is up-ward which means ICB Unit Fund gain that is

comparatively good against it’s investment cost.


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Chapter – Six

Findings Recommendations and

Conclusion


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6.1 Findings

ICB has established to develop capital market, to mobilize savings and to broaden the

base of investment. ICB operate the capital market with skilled and experience

financial experts. The credit of its good performance and reputation solely goes to its

professionals. All of its security trading and investment decision is taken by

professional management team.

ICB Unit Fund has gain investor confidence mainly medium savers. Public and

private sector employees accounted for 57.48% of total unit holders who are mainly

of small and medium size income group.

Findings which relate to different department of ICB and ICB Unit Fund are given

below:

ICB promote and establish subsidiary for business development and broaden

the base of investment.

ICB Unit Fund gives lucrative dividend.

Earning per unit is good with current situation.

ROI is a growing trend of ICB Unit Fund which gains reliability of investors.

Withdraw of any funds or securities, are very lengthy and complicated

process.

In case of buying and selling shares, which are ordered by investors, takes

much time to execute by ICB. So investors' are not getting their calculated

profit.

Office layout and interior decoration of ICB are not in good position.

Because of less employees and lack of proper training facilities, investors get

poor customer service.

Most of the people of Bangladesh are not very familiar with ICB's activity.


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6.2 Recommendations

Although ICB is one of the top performing company, I have some suggestion for ICB

to improve its performance be more efficient,

ICB has skilled and experiences fund manager but they perform only on

security trading. The trade monitors and stock fraud monitoring tram of ICB is

lack of human resource. ICB should enroll more human resource on those

fields.

ICB was should process a team of technical personnel to carry out the

appraisal ask. At least the Corporation should appoint some expertise that has

the ability to evaluate the supplied appraisal report which are now lacking.

The Corporation should have a training institution.

The Central Depository System (CDS) is essential in ICB.

IT sector of ICB needs Internal Transfer of Share (ITS).

Arrangement should be made to deliver the Unit Certificate to the investors

within the reasonable time limit.

In case of portfolio selection, the ICB Unit Fund management should include

those companies’s share which performance is better.

Unit Fund management should diversify its cash in those sector from which

high return is possible.


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6.3 Conclusion

To conclude this report it can be said that it was a great opportunity for me to study

the operational activities of the investment bank as well as capital market of the

country. The Investment Corporation of Bangladesh (ICB) is virtually the only

investment bank in Bangladesh. In a broader sense ICB is both Investment Bank and

Development Finance Institution (DFI). ICB plays a vital role to encourage and

broaden the base of investments and thereby to help develop the capital market in

Bangladesh.

My main focus on this report is operating system of ICB Unit Fund. From the analysis

it found that the Unit Funds position is good. There is low risk involvement. The main

reason behind this, there was no binding in size. ICB Unit Fund attracts investor by

well management. ICB Unit Fund also declared a handsome dividend.

The study is the first time for me to get the opportunity for conducting such an

elaborate study in this field. Hence, I do not know how far I am successful in writing

this report. But it is true I have tried sincerely to discharge my duties with zeal and

enthusiasm and to the best of satisfaction. However, I remain apologize for any error

or omission which may happen unwillingly.


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Bibliography

1. Investment Corporation of Bangladesh (ICB) 2014-2015. Annual Report ,

Dhaka ICB.

2. Investment Corporation of Bangladesh (ICB) 2013-14. Annual Report ,

Dhaka ICB.

3. Investment Corporation of Bangladesh (ICB) 2014-15. Annual Report of

Unit Fund , Dhaka ICB.

4. Investment Corporation of Bangladesh (ICB) 2013-14. Annual Report of

Unit Fund, Dhaka ICB.

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operating system of icb unit fund

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