Performance in Pooling of funds, making of portfolios and Dividend policy of Investment Corporation of Bangladesh (ICB)

Investment Corporation of Bangladesh (ICB) being a statutory corporation is mainly an investment bank. As an investment bank is a financial institution, which mobilizes fund from the surplus economic units and develops funds to the deficit economic units.

The main objective of ICB is to encourage and broaden the bases of investment, to develop the capital market and to accelerate the mobilization of fund.

The study has mainly concerned with the performance of ICB in three broad functional areas like: pooling of funds, making of portfolios and formulating and implementing a sound dividend policy. In doing the study, in depth analysis has been conducted on these three main issues. First of all, the company analysis and the profiles have been done to have an idea about the company. In this regard, The objectives of the company, basic functions, business policies, manpower’s and different business areas of ICB has been explained. Meanwhile, the company’s management and administration part has also been included in the begging part of the report where company’s institutional and regulatory framework has been explained along with the human resources.

ICB operates the business operations by the help of a huge numbers of departments in it. So, a different chapter has been included to explain the functions and activities of those departments. Due to the diversified functions performed by ICB, it consists of many departments. These departments are engaged in different activities to perform the business functions.

In this repot, ICB’s operational and functional areas have also been explained to have a clear idea about different functional areas of ICB. The operational areas have been explained with their results in the related field. However, ICB in some cases increase and curtail its operational areas according to its convenience and by the management decision. In this part, ICB’s financial results in these areas have also been discussed for the last two years. Among the different functional areas IPO issuing and lease finance are common.

Among the three main issues of the report, one of them is mobilization of fund. ICB acts a very important role in the mobilization of fund by collecting fund from the people who has excess fund in their hand out of their expenditures. ICB collects those funds by two major ways. One of them is ICB mutual fund and the other is ICB unit fund. Actually, ICB simultaneously raising fund from the households’ investors by these two way. Till now, ICB has collected fund up to Eight ICB mutual fund. Most recently ICB has created another mutual fund for the non-resident, which has not been included in this report due to the lack of proper information.

ICB’s another way of collecting fund from the households’ investors is ICB unit fund. This sort of fund does the same job like ICB mutual fund. This is just another vehicle of raising fund from the people and invests again in the capital market by making a good portfolio. The report consists of the number of these issues by ICB including the reason why the individuals invest their fund in the mutual and unit funds.

The second issue is the making of portfolio by ICB with the fund that has been collected from the investors. This not an easy task so far. Because, in this regard, ICB has to take the decision carefully in which areas it will invest he fund. First of all, ICB take decision in which industry it will invest the funds. After taking the decision and section of the industry, ICB thinks about different stocks of the companies. Once it takes its decision and determine its stocks of the company, ICB then thinks about he weight it will provide in each of the stock. And this way ICB make the portfolio. The detailed process of making portfolio has been explained in the report inside.

Dividend policy is one of the important decision by the ICB. Once it eared profit from its investment, the management takes decision about the declaration of the dividend for the investors. Here may be two scenarios, one is that, the management may declare the divined and the other is further expansion. If the management takes decision for further investment it does not declare any dividend for the investors. However the process of declaration has been discussed in the report inside.