The Investment Corporation of Bangladesh (ICB) received Tk1,000 crore from the Ministry of Finance on Monday to support the volatile stock market, confirmed its Managing Director Niranjan Chandra Debnath.
The amount came against the Tk13,000 crore support the corporation had sought, and the government released Tk1000 crore as a soft loan to be fully repaid in ten years, he told TIMES of Bangladesh.
After a one-year grace period, ICB will pay half-yearly instalments, including interest and principal, while the interest rate has been fixed at 5%.
The fund will be invested prudently in the stock market so that it supports the market and ensures returns necessary for repayment and for bringing ICB back on track, said its managing director.
Unlike before, ICB’s investment committee is now allowed to invest only in “A” category stocks, as the largest institutional investor in the market is still reeling from legacy losses in its stock portfolio.
In line with the interim government’s stance on uncovering hidden weaknesses within financial institutions, ICB adopted proper accounting methods and incurred an over Tk4856 crore consolidated loss in the 2024–25 fiscal year.
Part of the loss stemmed from ICB’s role as a de facto market-support institution, according to Debnath.
Corruption and the historic bureaucratic approach to portfolio management also dragged down its stock portfolio value to today’s levels, said ICB Chairman Professor Abu Ahmed.
He said many stocks have lost up to 90% of their market value since ICB purchased them, though its historic holdings of blue-chip stocks helped offset some of the damage.
He added that corruption among officials resulted in excessive entry into overvalued stocks, while the practice of exiting wrong investments early with smaller losses was never encouraged at ICB.
Even honest officials avoided booking timely losses for fear of government audit, said Professor Abu Ahmed, a reputed market expert.
Speaking to TIMES of Bangladesh on Monday, Managing Director Debnath expressed confidence that the corporation is reforming itself to stay competitive in the modern stock market in terms of governance and investment prudence.
“We need liquidity to stay afloat and regain strength,” he added.
DSEX, the broad-based index of the Dhaka Stock Exchange, recovered to 5,024 on Monday, from its recent low of 4,620 on 16 November.
The government support came at a good time as stocks are cheap now, said analysts.
“79% of A-category company shares are now trading below their mean prices of the 52-week high–low,” Royal Capital Head of Research Akramul Alam told TIMES of Bangladesh, adding, “It reflects a technical opportunity, while economic trends hint at lower interest rates and higher corporate earnings in the coming months.”
