Ific Bank 1St Mutual Fund Ipo Lottery Result 2010
The draw of the lottery for the IFIC Bank 1st Mutual Fund initial public offering (IPO) will be held on March 09, 2010 (10:30 AM)
Next at the Bangabandhu International Conference Centre at the Sher-e-Bangla Nagar in Dhaka, President of the DSE Rakibur Rahman confirmed Wednesday. The trading of the GP shares on the bourses is expected to begin by November 15 next.
The Scheule for IFIC Bank First Mutual Fund Lottery:
Date:March 09, 2010
Time: (10:30 AM)
Venue: Bangabandhu International Conference Centre
You can Get this result by Click Here
IIFIC Bank 1st Mutual Fund
SIZE OF THE FUND:Tk.1,200,000,000 divided into 120,000,000 units at par value of Tk. 10 each
SPONSOR'S CONTRIBUTION: 25,000,000 Units of Tk. 10 each at par for Tk. 250,000,000
PRE IPO PLACEMENT: 55,000,000 Units of Tk. 10 each at par for Tk. 550,000,000
PUBLIC OFFER : 40,000,000 Units of Tk. 10 each at par for Tk. 400,000,000
RESERVED FOR MUTUAL FUNDS: 4,000,000 Units of Tk. 10 each at par for Tk. 40,000,000
NON RESIDENT BANGLADESHIS: 4,000,000 Units of Tk. 10 each at par for Tk. 40,000,000
RESIDENT BANGLADESHIS: 32,000,000 Units of Tk. 10 each at par for Tk. 320,000,000
This Offer Document sets forth concisely the information
about the fund that a prospective investor ought to know
before investing. This Offer Document should be read
before making an application for the Units and should
be retained for future reference.
The particulars of the fund have been prepared in
accordance with as amended till date and filed with
Securities and Exchange Commission of Bangladesh.
The Issue/Fund shall be placed in "A" category.
The Fund shall apply for listing with both the Stock
Exchanges.
SPONSOR :
IFIC Bank Limited
TRUSTEE:
Investment Corporation of Bangladesh (ICB)
CUSTODIAN:
Investment Corporation of Bangladesh (ICB)
ASSET MANAGEMENT COMPANY:
RACE Management PCL
Subscription
Subscription opens:February 7,2010
Subscription closes: February 11,2010
For Non-Resident Bangladeshis
subscription closes on February 20,2010
Date of Publication of Prospectus:January 11,2010
IFIC BANK 1ST MUTUAL FUND
Highlights
1. Name: IFIC Bank 1st Mutual Fund
2. Size of the Fund: Tk. 1,200,000,000 divided into 120,000,000 units at par value of Tk. 10.00
each. In future the fund size will not be changed.
3. Face Value: Tk. 10.00 per unit.
4. Nature: Closed-end Mutual Fund with a tenure of 10 years.
5. Objective: The objective of the Fund is to provide attractive dividend to the unit holders by investing the
proceeds in the various instruments in the Bangladeshi Capital Market and Money Market.
6. Target Group: Individuals, institutions, non-resident Bangladeshis (NRB), mutual funds and collective
investment schemes are eligible to apply for investment in the Fund.
7. Dividend: Minimum 70% income of the Fund will be distributed as dividend in Bangladeshi Taka only at the
end of each accounting year. The Fund shall create a dividend equalization reserve fund to
ensure consistency in dividend.
8. Mode of Distribution: The dividend will be distributed within 30 days from the date of declaration.
9. Transferability: Units are transferable. The transfer will be made by the CDBL under electronic settlement
process.
10. Encashment: The Fund will be listed with DSE and CSE. So investment in this Fund will easily be encashable.
11. Tax Benefit: Income will be tax free up to certain level, which is permitted as per Finance Act. Investment in
the Fund would qualify for investment tax credit under section 44(2) of the Income Tax Ordinance
1984.
12. Report & Accounts: Every unit holder is entitled to receive annual report together with the yearly and half-yearly
statements of accounts as and when published.
IFIC BANK 1ST MUTUAL FUND
Risk Factors
Investing in the IFIC Bank 1st Mutual Fund (hereinafter the Fund) involves certain considerations in addition to the risks normally
associated with making investments in securities. There can be no assurance that the Fund will achieve its investment objectives.
The value of the Fund may go down as well as up and there can be no assurance that on redemption, or otherwise, investors will
receive the amount originally invested. Accordingly, the Fund is only suitable for investment by investors who understand the
risks involved and who are willing and able to withstand the loss of their investments. In particular, prospective investors should
consider the following risks:
1. In General: There is no assurance that the Fund will meet its investment objective; investors could lose money by
investing in the Fund. As with all mutual funds, an investment in the Fund is not insured or guaranteed by the
Government of Bangladesh or any other government agency.
2. Market Price Risk: Stock prices and Mutual Fund prices generally fluctuate because of the interplay of the various
market forces that may affect a single issuer, industry, or market as a whole. The Fund may lose its value or experience
a substantial loss on its investments due to such market volatility.
3. NAV Risk: Stock market trends show that prices of many listed securities move in unpredictable directions, which may
affect the value of the Fund's portfolio of listed securities. Depending on its exposure to such securities, the net asset
value of units issued under this Fund can go up or down depending on various factors and forces affecting the capital
markets. Moreover, there is no guarantee that the market price of unit of the Fund will fully reflect their underlying net
asset values.
4. Issuer Risk: In addition to market and price risk, value of an individual security can, in addition, be subject to factors
unique or specific to the issuer, including but not limited to management malfeasance, lack of accounting transparency,
management performance, management decision to take on financial leverage. Such risk can develop in an
unpredictable fashion and can only be partially mitigated, and sometimes not at all, through research or due diligence.
To the degree that the Fund is exposed to a security whose value declines due to issuer risk, the Fund's value may be
impaired.
5. Legal Risk: The Honorable High Court, in its verdict on November 8th, allowed mutual funds to expand their capital
base by issuing bonus and rights shares or pay dividends through cash or bonus shares, without curbing the regulator's
absolute power to determine which funds would be eligible to do so. However, although the case has been resolved by
the High Court, the Securities and Exchange Commission still has the provision to appeal against the verdict with the
Appellate Division of the Supreme Court and by exercising that option, the issue of dividends in any form may remain
pending once again.
6. Asset Allocation Risk: Due to a very thin secondary debt market in Bangladesh, it would be difficult for the Fund
Manager to swap between asset classes, if and when required. In addition, limited availability of money market
instruments in the market implies that there are only few opportunities for short term or temporary investments for
the Fund.
7. Lack of Diversification Risk: Due to small number of listed securities in both the stock exchanges, it may be difficult to
invest the Fund's assets in a widely diversified portfolio.
8. Liquidation Risk: Market conditions and investment allocation may impact on the ability to sell securities during periods
of market volatility. The Fund may not be able to sell securities or instruments at the appropriate price and/or time.
9. Dividend Risk: If the companies wherein the Fund will be invested fail to pay expected dividend, it may affect the
overall returns of the Fund.
10. Investment Strategy Risk: The Fund is subject to management strategy risk because it is an actively managed
investment portfolio.The AMC will apply investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these techniques and analyses will produce the desired results.
11. Socio-Political & Natural Disaster Risk: Uncertainties resulting from political and social instability may affect the value
of the Fund's Assets. In addition, adverse natural climatic condition may hamper the performance of the Fund.
IFIC BANK 1ST MUTUAL FUND
1. PRELIMINARY
1.1. PUBLICATION OF PROSPECTUS FOR PUBLIC OFFERING:
RACE Management PCL has received Registration Certificate from the Securities and Exchange Commission (SEC) under the
consistency in dividend.
5) The Asset Management Company shall dispatch the dividend warrants at the expense of the Fund, within 30 days of the
declaration of the dividend and shall submit a statement within next 7 (seven) days to the Commission, the Trustee and the
Custodian.
6) Before record of ownership by the CDBL, a transferee shall not possess the right to any dividend declared by the Fund.
Total NAV
-------------------------------
No. of units outstanding
IFIC BANK 1ST MUTUAL FUND
4. RISK CONSIDERATIONS
4.1. RISK FACTORS:
Investing in the IFIC Bank 1st Mutual Fund (hereinafter the Fund) involves certain considerations in addition to the risks normally
associated with making investments in securities. There can be no assurance that the Fund will achieve its investment
objectives. The value of the Fund may go down as well as up and there can be no assurance that on redemption, or otherwise,
investors will receive the amount originally invested. Accordingly, the Fund is only suitable for investment by investors who
understand the risks involved and who are willing and able to withstand the loss of their investments. In particular, prospective
investors should consider the following risks:
1. In General: There is no assurance that the Fund will meet its investment objective; investors could lose money by
investing in the Fund. As with all mutual funds, an investment in the Fund is not insured or guaranteed by the
Government of Bangladesh or any other government agency.
2. Market Price Risk: Stock prices and Mutual Fund prices generally fluctuate because of the interplay of the various
market forces that may affect a single issuer, industry, or market as a whole. The Fund may lose its value or experience
a substantial loss on its investments due to such market volatility.
3. NAV Risk: Stock market trends show that prices of many listed securities move in unpredictable directions, which may
affect the value of the Fund's securities of listed securities. Depending on its exposure to such securities, the net asset
value of units issued under this Fund can go up or down depending on various factors and forces affecting the capital
markets. Moreover, there is no guarantee that the market price of unit of the Fund will fully reflect their underlying net
asset values.
4. Issuer Risk: In addition to market and price risk, value of an individual security can, in addition, be subject to factors
unique or specific to the issuer, including but not limited to management malfeasance, lack of accounting transparency,
management performance, management decision to take on financial leverage. Such risk can develop in an
unpredictable fashion and can only be partially mitigated, and sometimes not at all, through research or due diligence.
To the degree that the Fund is exposed to a security whose value declines due to issuer risk, the Fund's value may be
impaired.
5. Legal Risk: The Honorable High Court, in its verdict on November 8th, allowed mutual funds to expand their capital
base by issuing bonus and rights shares or pay dividends through cash or bonus shares, without curbing the regulator's
absolute power to determine which funds would be eligible to do so. However, although the case has been resolved by
the High Court, the Securities and Exchange Commission still has the provision to appeal against the verdict with the
Appellate Division of the Supreme Court and by exercising that option, the issue of dividends in any form may remain
pending once again.
6. Asset Allocation Risk: Due to a very thin secondary debt market in Bangladesh, it would be difficult for the Fund
Manager to swap between asset classes, if and when required. In addition, limited availability of money market
instruments in the market implies that there are only few opportunities for short term or temporary investments for
the Fund.
7. Lack of Diversification Risk: Due to small number of listed securities in both the stock exchanges, it may be difficult to
invest the Fund's assets in a widely diversified portfolio.
8. Liquidation Risk: Market conditions and investment allocation may impact on the ability to sell securities during periods
of market volatility. The Fund may not be able to sell securities or instruments at the appropriate price and/or time.
9. Dividend Risk: If the companies wherein the Fund will be invested fail to pay expected dividend, it may affect the
overall returns of the Fund.
10. Investment Strategy Risk: The Fund is subject to management strategy risk because it is an actively managed
investment portfolio. The AMC will apply investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these techniques and analyses will produce the desired results.
11. Socio-Political & Natural Disaster Risk: Uncertainties resulting from political and social instability may affect the value
of the Fund's Assets. In addit 00004000 ion, adverse natural climatic condition may hamper the performance of the Fund.
IFIC BANK 1ST MUTUAL FUND
4.2. EXPECTED MARKET PERFORMANCE OF THE FUND:
1) It is expected that demand for the IFIC Bank 1st Mutual Fund units will always rule over supply.
2) Brand name of IFIC Bank Limited and Trustee, ICB's track record in the successful marketing of several mutual funds in the
past may motivate investors to invest in this Fund.
3) World class investment management team of the RACE Management PCL as a new-generation Asset Management Company
(AMC) would attract investors to invest in this Fund.
4.3. WHO SHOULD INVEST AND HOW MUCH TO INVEST:
1) Individuals who do not have tolerance of bearing risk and know nothing about the functioning of the capital market need
not apply for the units of the Fund.
2) Individuals who are looking for long-term capital growth and consistent dividend payment and are comfortable with the
risks associated with equity investments should consider investing in the Fund.
3) An individual should also consider investing in the Fund if he/she can accept some variability of returns, have a moderate
tolerance for risk and are planning to invest in the Fund over the medium to long-term.
4) Considering other factors like the investment opportunities available in the market, return expectation, income level and
consumption pattern, one may put only a portion of his/her total portfolio into the Fund.
IFIC BANK 1ST MUTUAL FUND
5. FORMATION, MANAGEMENT AND ADMINISTRATION
5.1. SPONSOR OF THE FUND:
IFIC Bank Limited is a first-generation private commercial bank with 82 (eighty two) branches across various regions in
Bangladesh. With its stock listed on both Dhaka and Chittagong Stock Exchanges, IFIC Bank Ltd. offers a full range of commercial
banking products and services to corporate, middle-market and retail segments. Being one of the oldest private commercial
banks, IFIC Bank has unique insights into the dynamics in the corporate and financial sector. The Bank strongly believes that the
stock market in Bangladesh is entering a secular growth phase and is becoming an attractive destination for both savings and
investment capital in Bangladesh. As a result, IFIC is increasing its presence in the Bangladeshi stock market and has recently
started stock trading and brokerage services for its clients.
IFIC Bank is the first first-generation bank to sponsor a mutual fund, believing that IFIC Bank 1st Mutual Fund will play a positive
role in developing the Bangladeshi Mutual Fund industry. With that in mind, IFIC Bank has appointed RACE Management PCL as
the Fund Manager. RACE Management is a next-generation asset management company has successfully launched the EBL First
Mutual Fund, the first-ever bank sponsored mutual fund in Bangladesh.
5.2. TRUSTEE & CUSTODIAN OF THE FUND:
In order to ensure maximum trust and confidence of the investors, supervisory bodies and potential investors in the fund, the
Investment Corporation of Bangladesh (ICB) will act as the Trustee and Custodian of the Fund.
The Investment Corporation of Bangladesh (ICB) was established on 01 October 1976, under "The Investment Corporation of
Bangladesh" Ordinance, 1976 (No. XL of 1976) to encourage and broaden the base of investment, develop the capital market,
mobilize savings, promote and establish subsidiaries for business development and provide for matters ancillary thereto. Over
the years, the activities of ICB have grown manifold, particularly in Merchant Banking, Mutual Funds operations and stock
brokerage activities. ICB is the biggest investment bank and the harbinger of mutual fund industry in the country. Out of
country's 17 (seventeen) closed-end mutual funds, ICB and its subsidiary manage 13 (thirteen) mutual funds.
As of August 2009, ICB has acted as Trustee to the 11 debenture issuances involving Tk. 155.95 crores, issues of 8 bond issuances
involving Tk. 817 crores. ICB also performed the responsibilities of trustee and custodian to 9 closed-end mutual funds of Tk. 475
crores and 2 open-end mutual funds with initial capital of Tk. 40 crores.
5.3. ASSET MANAGER OF THE FUND:
RACE Management PCL (hereinafter RACE) will act as the Asset Manager of the Fund. RACE is a second-generation asset
management company, receiving its Asset Management license in September 2008 after fulfilling rigorous due diligence
requirements of the SEC. RACE Management has already established a successful track record by launching the first-ever
commercial bank sponsored mutual fund, EBL First Mutual Fund and is the only second generation asset management company
to have a mutual fund under management in Bangladesh.
The RACE Team: With about 30 professionals, RACE has one of the largest asset management teams in Bangladesh which
includes (1) senior Bangladeshi investment professionals with world-class training and over a decade of experience in
investment management and research in some of the worlds' most developed capital markets; (2) Senior Bangladeshi
professionals from the local banking and financial services industry with strong operational experience and an extensive contact
base among the local business community; (3) a cadre of young professionals who have gained unique insights into the local
capital markets through the application of sophisticated investment techniques and on-the-ground research.
The investment management operation of RACE is managed by a team of investment professionals and is guided by an
Investment Committee. The Investment Committee reviews the Fund portfolio selection process to ensure compliance with the
objectives set out in the Trust Deed. In addition, the RACE Investment Committee pays special regard to guidelines regarding
restriction on investments/investment limits as prescribed from time to time; these restrictions relate to single company/group
investments, investments in associate companies, investments in unrated debt instruments etc. In addition, the RACE
Investment Committee also reviews the portfolio periodically to assess liquidity positions and evaluate the risk parameters and
will, from time to time, rebalance the portfolio.
IFIC BANK 1ST MUTUAL FUND
RACE Approach to Fund Management: Highly Process-Driven Investment Approach
A flexible yet disciplined investment process is the hallmark of a professional investment management fund. Incorporating the
intellectual capital and collective experience of the RACE's senior investment professionals, RACE has developed a 7-step
investment process:
Step 1: Universe Selection. The first step of the investment process begins with identifying the universe of stocks. These
stocks are then classified in four categories based on RACE's proprietary selection methodology.
Step 2: Focus List. The universe of stock is then narrowed down to build a prospective focus list. This step is usually done in
phases. The first phase involves narrowing down the list through RACE's proprietary filtering process. The second phase
involves narrowing the list further through the fundamental research inputs.
Step 3: "Top Down" Analysis involves analysis of macroeconomic trends, analysis on broad market indices, analysis of fund
flow trend to formulate sector biases and sector allocations.
Step 4: "Bottoms Up" Company Analysis. This step involves a combination of individual security analysis based on multiple
parameters, including valuation, qualitative analysis to identify business trends, competitive outlook and corporate
management. These analyses are supplemented by company visits and information exchange with management.
Step 5: Portfolio Construction. The next step is to create an optimum portfolio with the goal of maximizing returns and
minimizing risk.
Step 6: Risk Management. This step applies the pre-determined position limits to the portfolio, limiting sector exposure and
individual stock exposure. Maintaining lower volatility is also an important concern; to this end, beta adjustment and other
sophisticated risk analysis is used.
Step 7: Trade Execution: RACE uses a combination of quantitative strategies and market information to maximize its trade
executions. To this end, RACE has selected a panel of brokers to execute its trades in an efficient and confidential manner.
5.4. AUDITORS:
The Trustee, ICB has appointed Hoda Vasi Chowdhury & Co. Chartered Accountants as the Auditor of the Fund for the first year.
It is one of the reputed and oldest audit firms of the country and is associated with world-renowned Deloitte Touche Tohmatsu.
The Trustee will continue to appoint the Fund Auditor throughout the tenure of the Fund.
5.5. LIMITATION OF EXPENSES:
1) The initial issue expenses in respect of the Fund shall not exceed 5% of the Fund to be raised, the details of which are
provided in this Prospectus.
2) The total expenses charged to the Fund except the amortization of initial issue expenses including transactions cost in the
form of stock brokerage against buy and sell of securities forming a part of acquisition or disposal cost of such securities,
transaction fees payable to the Custodian against acquisition or disposal of securities, CDBL Charges, listing fees payable to
the stock exchanges, the annual registration fees payable to the Commission, audit fees, cost for publication of reports and
periodicals, bank charge, etc., shall not exceed 4% of the weekly average net assets outstanding during any accounting year
or as may be determined by the Rules.
IFIC BANK 1ST MUTUAL FUND
5.6. FEES AND EXPENSES:
The Fund will pay the fees of Asset Management Company, the Trustee and the Custodian together with any other fees,
commissions and expenses as may arise from time to time. The Fund will bear its own costs and expenses incurred/accrued in
connection with its formation, promotion, registration, public offering, listing together with certain other costs and expenses
incurred in its operation, including without limitation, expenses of legal and consulting services, auditing, other professional fees
and expenses, brokerage, share/debenture registration expenses, guarantee or underwriting commission and fees due to the
SEC. The Fund will also bear all other incidental expenses including printing, publication and stationery relating to its smooth and
fair operation.
RACE has estimated the normal annual operating expenses of the Fund will not exceed 4% of the average NAV of the Fund.
However, there may be variation in the actual operating expenses of the Fund. Major expenses of the Fund are detailed as
follows:
1) Issue and Formation Expenses: Issue and formation expenses are estimated to be not over 5% of the total Fund size. The
expenses will be amortized within 10 (ten) years on a straight-line method. The estimated expenses for the issue and
formation of the Fund are presented below:
1. Banker to the issue fee/Collection Charge : 0.60 percent
2. Formation Fee Payable to AMC : 1.00 percent
3. Printing & Publication : 0.60 percent
3. Legal Expenses (Listing Fees, registration Fees etc.) : 1.20 percent
4. Other expenses : 0.80 percent
Total : 4.20 percent
2) Management Fee: As per aaaaaaa
