Ific Bank 1St Mutual Fund Ipo Lottery Result 2010

The draw of the lottery for the IFIC Bank 1st Mutual6. Asset Allocation Risk: Due to a very thin secondary
Fund initial public offering (IPO) will be held on Marchdebt market in Bangladesh, it would be difficult for
09, 2010 (10:30 AM)the Fund
Next at the Bangabandhu International ConferenceManager to swap between asset classes, if and
Centre at the Sher-e-Bangla Nagar in Dhaka,when required. In addition, limited availability of money
President of the DSE Rakibur Rahman confirmedmarketinstruments in the market implies that there
Wednesday. The trading of the GP shares on theare only few opportunities for short term or
bourses is expected to begin by November 15 next.temporary investments forthe Fund.
The Scheule for IFIC Bank First Mutual Fund Lottery:7. Lack of Diversification Risk: Due to small number of
Date:March 09, 2010listed securities in both the stock exchanges, it may
Time: (10:30 AM)be difficult toinvest the Fund's assets in a widely
Venue: Bangabandhu International Conference Centrediversified portfolio.
8. Liquidation Risk: Market conditions and investment
You can Get this result by Click Hereallocation may impact on the ability to sell securities
during periodsof market volatility. The Fund may not
be able to sell securities or instruments at the
IIFIC Bank 1st Mutual Fundappropriate price and/or time.
SIZE OF THE FUND:Tk.1,200,000,000 divided into9. Dividend Risk: If the companies wherein the Fund
120,000,000 units at par value of Tk. 10 eachwill be invested fail to pay expected dividend, it may
SPONSOR'S CONTRIBUTION: 25,000,000 Units of Tk.affect theoverall returns of the Fund.
10 each at par for Tk. 250,000,00010. Investment Strategy Risk: The Fund is subject to
PRE IPO PLACEMENT: 55,000,000 Units of Tk. 10management strategy risk because it is an actively
each at par for Tk. 550,000,000managedinvestment portfolio. The AMC will apply
PUBLIC OFFER : 40,000,000 Units of Tk. 10 each atinvestment techniques and risk analyses in making
par for Tk. 400,000,000investment decisions forthe Fund, but there can be
RESERVED FOR MUTUAL FUNDS: 4,000,000 Units ofno guarantee that these techniques and analyses will
Tk. 10 each at par for Tk. 40,000,000produce the desired results.
NON RESIDENT BANGLADESHIS: 4,000,000 Units of11. Socio-Political & Natural Disaster Risk: Uncertainties
Tk. 10 each at par for Tk. 40,000,000resulting from political and social instability may affect
RESIDENT BANGLADESHIS: 32,000,000 Units of Tk.the valueof the Fund's Assets. In addition, adverse
10 each at par for Tk. 320,000,000natural climatic condition may hamper the
This Offer Document sets forth concisely theperformance of the Fund.
informationabout the fund that a prospectiveIFIC BANK 1ST MUTUAL FUND
investor ought to knowbefore investing. This Offer4.2. EXPECTED MARKET PERFORMANCE OF THE
Document should be readbefore making an applicationFUND:
for the Units and shouldbe retained for future1) It is expected that demand for the IFIC Bank 1st
reference.Mutual Fund units will always rule over supply.
The particulars of the fund have been prepared2) Brand name of IFIC Bank Limited and Trustee,
inaccordance with  as amended till date and filedICB's track record in the successful marketing of
withseveral mutual funds in thepast may motivate
Securities and Exchange Commission of Bangladesh.investors to invest in this Fund.
The Issue/Fund shall be placed in "A" category.3) World class investment management team of the
The Fund shall apply for listing with both the StockRACE Management PCL as a new-generation Asset
Exchanges.Management Company
SPONSOR :(AMC) would attract investors to invest in this Fund.
IFIC Bank Limited4.3. WHO SHOULD INVEST AND HOW MUCH TO
TRUSTEE:INVEST:
Investment Corporation of Bangladesh (ICB)1) Individuals who do not have tolerance of bearing
CUSTODIAN:risk and know nothing about the functioning of the
Investment Corporation of Bangladesh (ICB)capital market neednot apply for the units of the
ASSET MANAGEMENT COMPANY:Fund.
RACE Management PCL2) Individuals who are looking for long-term capital
Subscriptiongrowth and consistent dividend payment and are
Subscription opens:February 7,2010comfortable with therisks associated with equity
Subscription closes: February 11,2010investments should consider investing in the Fund.
For Non-Resident Bangladeshissubscription closes on3) An individual should also consider investing in the
February 20,2010Fund if he/she can accept some variability of returns,
Date of Publication of Prospectus:January 11,2010have a moderatetolerance for risk and are planning to
IFIC BANK 1ST MUTUAL FUNDinvest in the Fund over the medium to long-term.
Highlights4) Considering other factors like the investment
1. Name: IFIC Bank 1st Mutual Fundopportunities available in the market, return
2. Size of the Fund: Tk. 1,200,000,000 divided intoexpectation, income level andconsumption pattern,
120,000,000 units at par value of Tk. 10.00each. Inone may put only a portion of his/her total portfolio
future the fund size will not be changed.into the Fund.
3. Face Value: Tk. 10.00 per unit.IFIC BANK 1ST MUTUAL FUND
4. Nature: Closed-end Mutual Fund with a tenure of 105. FORMATION, MANAGEMENT AND
years.ADMINISTRATION
5. Objective: The objective of the Fund is to provide5.1. SPONSOR OF THE FUND:
attractive dividend to the unit holders by investingIFIC Bank Limited is a first-generation private
theproceeds in the various instruments in thecommercial bank with 82 (eighty two) branches
Bangladeshi Capital Market and Money Market.across various regions in
6. Target Group: Individuals, institutions, non-residentBangladesh. With its stock listed on both Dhaka and
Bangladeshis (NRB), mutual funds andChittagong Stock Exchanges, IFIC Bank Ltd. offers a
collectiveinvestment schemes are eligible to apply forfull range of commercialbanking products and services
investment in the Fund.to corporate, middle-market and retail segments.
7. Dividend: Minimum 70% income of the Fund will beBeing one of the oldest private commercialbanks,
distributed as dividend in Bangladeshi Taka only atIFIC Bank has unique insights into the dynamics in the
theend of each accounting year. The Fund shallcorporate and financial sector. The Bank strongly
create a dividend equalization reserve fund toensurebelieves that thestock market in Bangladesh is
consistency in dividend.entering a secular growth phase and is becoming an
8. Mode of Distribution: The dividend will be distributedattractive destination for both savings andinvestment
within 30 days from the date of declaration.capital in Bangladesh. As a result, IFIC is increasing its
9. Transferability: Units are transferable. The transferpresence in the Bangladeshi stock market and has
will be made by the CDBL under electronicrecentlystarted stock trading and brokerage services
settlementprocess.for its clients.
10. Encashment: The Fund will be listed with DSE andIFIC Bank is the first first-generation bank to sponsor
CSE. So investment in this Fund will easily bea mutual fund, believing that IFIC Bank 1st Mutual
encashable.Fund will play a positiverole in developing the
11. Tax Benefit: Income will be tax free up to certainBangladeshi Mutual Fund industry. With that in mind,
level, which is permitted as per Finance Act.IFIC Bank has appointed RACE Management PCL
Investment inthe Fund would qualify for investmentasthe Fund Manager. RACE Management is a
tax credit under section 44(2) of the Income Taxnext-generation asset management company has
Ordinancesuccessfully launched the EBL First
1984.Mutual Fund, the first-ever bank sponsored mutual
12. Report & Accounts: Every unit holder is entitledfund in Bangladesh.
to receive annual report together with the yearly and5.2. TRUSTEE & CUSTODIAN OF THE FUND:
half-yearlystatements of accounts as and whenIn order to ensure maximum trust and confidence of
published.the investors, supervisory bodies and potential
IFIC BANK 1ST MUTUAL FUNDinvestors in the fund, the
Risk FactorsInvestment Corporation of Bangladesh (ICB) will act
Investing in the IFIC Bank 1st Mutual Fundas the Trustee and Custodian of the Fund.
(hereinafter the Fund) involves certain considerationsThe Investment Corporation of Bangladesh (ICB)
in addition to the risks normallyassociated with makingwas established on 01 October 1976, under "The
investments in securities. There can be no assuranceInvestment Corporation of
that the Fund will achieve its investment objectives.Bangladesh" Ordinance, 1976 (No. XL of 1976) to
The value of the Fund may go down as well as upencourage and broaden the base of investment,
and there can be no assurance that on redemption,develop the capital market,mobilize savings, promote
or otherwise, investors willreceive the amountand establish subsidiaries for business development
originally invested. Accordingly, the Fund is onlyand provide for matters ancillary thereto. Overthe
suitable for investment by investors who understandyears, the activities of ICB have grown manifold,
therisks involved and who are willing and able toparticularly in Merchant Banking, Mutual Funds
withstand the loss of their investments. In particular,operations and stockbrokerage activities. ICB is the
prospective investors shouldconsider the followingbiggest investment bank and the harbinger of mutual
risks:fund industry in the country. Out ofcountry's 17
1. In General: There is no assurance that the Fund will(seventeen) closed-end mutual funds, ICB and its
meet its investment objective; investors could losesubsidiary manage 13 (thirteen) mutual funds.
money byinvesting in the Fund. As with all mutualAs of August 2009, ICB has acted as Trustee to the
funds, an investment in the Fund is not insured or11 debenture issuances involving Tk. 155.95 crores,
guaranteed by theissues of 8 bond issuancesinvolving Tk. 817 crores.
Government of Bangladesh or any other governmentICB also performed the responsibilities of trustee and
agency.custodian to 9 closed-end mutual funds of Tk.
2. Market Price Risk: Stock prices and Mutual Fund475crores and 2 open-end mutual funds with initial
prices generally fluctuate because of the interplay ofcapital of Tk. 40 crores.
the variousmarket forces that may affect a single5.3. ASSET MANAGER OF THE FUND:
issuer, industry, or market as a whole. The Fund mayRACE Management PCL (hereinafter RACE) will act
lose its value or experiencea substantial loss on itsas the Asset Manager of the Fund. RACE is a
investments due to such market volatility.second-generation assetmanagement company,
3. NAV Risk: Stock market trends show that pricesreceiving its Asset Management license in September
of many listed securities move in unpredictable2008 after fulfilling rigorous due diligencerequirements
directions, which mayaffect the value of the Fund'sof the SEC. RACE Management has already
portfolio of listed securities. Depending on itsestablished a successful track record by launching the
exposure to such securities, the net assetvalue offirst-evercommercial bank sponsored mutual fund,
units issued under this Fund can go up or downEBL First Mutual Fund and is the only second
depending on various factors and forces affectinggeneration asset management companyto have a
the capitalmarkets. Moreover, there is no guaranteemutual fund under management in Bangladesh.
that the market price of unit of the Fund will fullyThe RACE Team: With about 30 professionals, RACE
reflect their underlying netasset values.has one of the largest asset management teams in
4. Issuer Risk: In addition to market and price risk,Bangladesh whichincludes (1) senior Bangladeshi
value of an individual security can, in addition, beinvestment professionals with world-class training and
subject to factorsunique or specific to the issuer,over a decade of experience ininvestment
including but not limited to management malfeasance,management and research in some of the worlds'
lack of accounting transparency,managementmost developed capital markets; (2) Senior
performance, management decision to take onBangladeshiprofessionals from the local banking and
financial leverage. Such risk can develop infinancial services industry with strong operational
anunpredictable fashion and can only be partiallyexperience and an extensive contactbase among the
mitigated, and sometimes not at all, through researchlocal business community; (3) a cadre of young
or due diligence.professionals who have gained unique insights into the
To the degree that the Fund is exposed to alocalcapital markets through the application of
security whose value declines due to issuer risk, thesophisticated investment techniques and
Fund's value may beimpaired.on-the-ground research.
5. Legal Risk: The Honorable High Court, in its verdictThe investment management operation of RACE is
on November 8th, allowed mutual funds to expandmanaged by a team of investment professionals and
their capitalbase by issuing bonus and rights shares oris guided by an
pay dividends through cash or bonus shares, withoutInvestment Committee. The Investment Committee
curbing the regulator'sabsolute power to determinereviews the Fund portfolio selection process to
which funds would be eligible to do so. However,ensure compliance with theobjectives set out in the
although the case has been resolved bythe HighTrust Deed. In addition, the RACE Investment
Court, the Securities and Exchange Commission stillCommittee pays special regard to guidelines
has the provision to appeal against the verdict withregardingrestriction on investments/investment limits
theas prescribed from time to time; these restrictions
Appellate Division of the Supreme Court and byrelate to single company/groupinvestments,
exercising that option, the issue of dividends in anyinvestments in associate companies, investments in
form may remainpending once again.unrated debt instruments etc. In addition, the RACE
6. Asset Allocation Risk: Due to a very thin secondaryInvestment Committee also reviews the portfolio
debt market in Bangladesh, it would be difficult forperiodically to assess liquidity positions and evaluate
the Fundthe risk parameters andwill, from time to time,
Manager to swap between asset classes, if andrebalance the portfolio.
when required. In addition, limited availability of moneyIFIC BANK 1ST MUTUAL FUND
marketinstruments in the market implies that thereRACE Approach to Fund Management: Highly
are only few opportunities for short term orProcess-Driven Investment Approach
temporary investments forthe Fund.A flexible yet disciplined investment process is the
7. Lack of Diversification Risk: Due to small number ofhallmark of a professional investment management
listed securities in both the stock exchanges, it mayfund. Incorporating theintellectual capital and collective
be difficult toinvest the Fund's assets in a widelyexperience of the RACE's senior investment
diversified portfolio.professionals, RACE has developed a
8. Liquidation Risk: Market conditions and investment7-stepinvestment process:
allocation may impact on the ability to sell securitiesStep 1: Universe Selection. The first step of the
during periodsof market volatility. The Fund may notinvestment process begins with identifying the
be able to sell securities or instruments at theuniverse of stocks. Thesestocks are then classified in
appropriate price and/or time.four categories based on RACE's proprietary
9. Dividend Risk: If the companies wherein the Fundselection methodology.
will be invested fail to pay expected dividend, it mayStep 2: Focus List. The universe of stock is then
affect theoverall returns of the Fund.narrowed down to build a prospective focus list. This
10. Investment Strategy Risk: The Fund is subject tostep is usually done inphases. The first phase involves
management strategy risk because it is an activelynarrowing down the list through RACE's proprietary
managedinvestment portfolio.The AMC will applyfiltering process. The second phaseinvolves narrowing
investment techniques and risk analyses in makingthe list further through the fundamental research
investment decisions forthe Fund, but there can beinputs.
no guarantee that these techniques and analyses willStep 3: "Top Down" Analysis involves analysis of
produce the desired results.macroeconomic trends, analysis on broad market
11. Socio-Political & Natural Disaster Risk: Uncertaintiesindices, analysis of fundflow trend to formulate
resulting from political and social instability may affectsector biases and sector allocations.
the valueof the Fund's Assets. In addition, adverseStep 4: "Bottoms Up" Company Analysis. This step
natural climatic condition may hamper theinvolves a combination of individual security analysis
performance of the Fund.based on multipleparameters, including valuation,
IFIC BANK 1ST MUTUAL FUNDqualitative analysis to identify business trends,
1. PRELIMINARYcompetitive outlook and corporatemanagement.
1.1. PUBLICATION OF PROSPECTUS FOR PUBLICThese analyses are supplemented by company visits
OFFERING:and information exchange with management.
RACE Management PCL has received RegistrationStep 5: Portfolio Construction. The next step is to
Certificate from the Securities and Exchangecreate an optimum portfolio with the goal of
Commission (SEC) under theconsistency in dividend.maximizing returns andminimizing risk.
5) The Asset Management Company shall dispatchStep 6: Risk Management. This step applies the
the dividend warrants at the expense of the Fund,pre-determined position limits to the portfolio, limiting
within 30 days of thedeclaration of the dividend andsector exposure andindividual stock exposure.
shall submit a statement within next 7 (seven) daysMaintaining lower volatility is also an important
to the Commission, the Trustee and theconcern; to this end, beta adjustment and
Custodian.othersophisticated risk analysis is used.
6) Before record of ownership by the CDBL, aStep 7: Trade Execution: RACE uses a combination of
transferee shall not possess the right to any dividendquantitative strategies and market information to
declared by the Fund.maximize its tradeexecutions. To this end, RACE has
Total NAVselected a panel of brokers to execute its trades in
No. of units outstandingan efficient and confidential manner.
IFIC BANK 1ST MUTUAL FUND5.4. AUDITORS:
4. RISK CONSIDERATIONSThe Trustee, ICB has appointed Hoda Vasi
4.1. RISK FACTORS:Chowdhury & Co. Chartered Accountants as the
Investing in the IFIC Bank 1st Mutual FundAuditor of the Fund for the first year.
(hereinafter the Fund) involves certain considerationsIt is one of the reputed and oldest audit firms of the
in addition to the risks normallyassociated with makingcountry and is associated with world-renowned
investments in securities. There can be no assuranceDeloitte Touche Tohmatsu.
that the Fund will achieve its investmentobjectives.The Trustee will continue to appoint the Fund Auditor
The value of the Fund may go down as well as upthroughout the tenure of the Fund.
and there can be no assurance that on redemption,5.5. LIMITATION OF EXPENSES:
or otherwise,investors will receive the amount1) The initial issue expenses in respect of the Fund
originally invested. Accordingly, the Fund is onlyshall not exceed 5% of the Fund to be raised, the
suitable for investment by investors whounderstanddetails of which areprovided in this Prospectus.
the risks involved and who are willing and able to2) The total expenses charged to the Fund except
withstand the loss of their investments. In particular,the amortization of initial issue expenses including
prospectiveinvestors should consider the followingtransactions cost in theform of stock brokerage
risks:against buy and sell of securities forming a part of
1. In General: There is no assurance that the Fund willacquisition or disposal cost of such
meet its investment objective; investors could losesecurities,transaction fees payable to the Custodian
money byinvesting in the Fund. As with all mutualagainst acquisition or disposal of securities, CDBL
funds, an investment in the Fund is not insured orCharges, listing fees payable tothe stock exchanges,
guaranteed by thethe annual registration fees payable to the
Government of Bangladesh or any other governmentCommission, audit fees, cost for publication of
agency.reports andperiodicals, bank charge, etc., shall not
2. Market Price Risk: Stock prices and Mutual Fundexceed 4% of the weekly average net assets
prices generally fluctuate because of the interplay ofoutstanding during any accounting yearor as may be
the variousmarket forces that may affect a singledetermined by the Rules.
issuer, industry, or market as a whole. The Fund mayIFIC BANK 1ST MUTUAL FUND
lose its value or experiencea substantial loss on its5.6. FEES AND EXPENSES:
investments due to such market volatility.The Fund will pay the fees of Asset Management
3. NAV Risk: Stock market trends show that pricesCompany, the Trustee and the Custodian together
of many listed securities move in unpredictablewith any other fees,commissions and expenses as
directions, which mayaffect the value of the Fund'smay arise from time to time. The Fund will bear its
securities of listed securities. Depending on itsown costs and expenses incurred/accrued
exposure to such securities, the net assetvalue ofinconnection with its formation, promotion,
units issued under this Fund can go up or downregistration, public offering, listing together with
depending on various factors and forces affectingcertain other costs and expensesincurred in its
the capitalmarkets. Moreover, there is no guaranteeoperation, including without limitation, expenses of
that the market price of unit of the Fund will fullylegal and consulting services, auditing, other
reflect their underlying netasset values.professional feesand expenses, brokerage, share
4. Issuer Risk: In addition to market and price risk,debenture registration expenses, guarantee or
value of an individual security can, in addition, beunderwriting commission and fees due to the
subject to factorsunique or specific to the issuer,SEC. The Fund will also bear all other incidental
including but not limited to management malfeasance,expenses including printing, publication and stationery
lack of accounting transparency,managementrelating to its smooth andfair operation.
performance, management decision to take onRACE has estimated the normal annual operating
financial leverage. Such risk can develop inexpenses of the Fund will not exceed 4% of the
anunpredictable fashion and can only be partiallyaverage NAV of the Fund.
mitigated, and sometimes not at all, through researchHowever, there may be variation in the actual
or due diligence.operating expenses of the Fund. Major expenses of
To the degree that the Fund is exposed to athe Fund are detailed asfollows:
security whose value declines due to issuer risk, the1) Issue and Formation Expenses: Issue and
Fund's value may beimpaired.formation expenses are estimated to be not over
5. Legal Risk: The Honorable High Court, in its verdict5% of the total Fund size. Theexpenses will be
on November 8th, allowed mutual funds to expandamortized within 10 (ten) years on a straight-line
their capitalbase by issuing bonus and rights shares ormethod. The estimated expenses for the issue
pay dividends through cash or bonus shares, withoutandformation of the Fund are presented below:
curbing the regulator'sabsolute power to determine1. Banker to the issue fee/Collection Charge : 0.60
which funds would be eligible to do so. However,percent
although the case has been resolved bythe High2. Formation Fee Payable to AMC : 1.00 percent
Court, the Securities and Exchange Commission still3. Printing & Publication : 0.60 percent
has the provision to appeal against the verdict with3. Legal Expenses (Listing Fees, registration Fees etc.)
the: 1.20 percent
Appellate Division of the Supreme Court and by4. Other expenses : 0.80 percent
exercising that option, the issue of dividends in anyTotal : 4.
form may remainpending once again.