Mutual funds surge as court clears conversion, liquidation process
Under regulations introduced in May 2026, closed-end mutual funds trading at discounts of 25% or more to their Net Asset Value (NAV) must either convert into open-end funds or be liquidated.
The mutual fund sector led gains on the Dhaka Stock Exchange (DSE) today (18 June), posting a 4.3% return as investor sentiment surged following a key court ruling that cleared the way for the restructuring of closed-end funds.
The rally was triggered after the Chamber Court of the Appellate Division stayed a High Court order that had halted the conversion or liquidation of closed-end mutual funds. The order, issued by Justice Farah Mahbub following a petition by the Bangladesh Securities and Exchange Commission (BSEC), removed a major legal obstacle to implementing the regulator's latest directive.
Under regulations introduced in May 2026, closed-end mutual funds trading at discounts of 25% or more to their Net Asset Value (NAV) must either convert into open-end funds or be liquidated.
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Market participants said the move could revive the long-underperforming sector by providing an exit route for investors whose holdings had traded at steep discounts for years.
The impact was immediate. Of the 36 listed closed-end mutual funds, only two posted losses during the trading session.
First Janata Bank Mutual Fund and Trust Bank First Mutual Fund hit the 10% upper circuit limit, while LR Global Bangladesh Mutual Fund One gained 9.38% and Green Delta Mutual Fund advanced 8.82%.
The broader market also extended its upward trend. The benchmark DSEX rose 39 points to 5,661, while the blue-chip DS30 index gained 30 points to close at 2,143. Turnover stood at Tk 1,197 crore, reflecting strong market participation.
Beyond mutual funds, the cement and telecommunications sectors also performed strongly, registering gains of 2.5% and 1.6%, respectively.
