The Finance Ministry has prolonged the duration of the Tk 9 billion special fund, overseen by the state-owned Investment Corporation of Bangladesh (ICB), for an additional five years to maintain stock market stability. Consequently, the fund, initially set to expire in December 2027, will now be valid until December 2032.

This special fund was originally established to foster market development and support small investors, and it currently plays a significant role in enhancing the investment capacity of brokerage firms and other intermediary institutions.

A senior official from the ICB’s Special Fund Management Unit indicated that the Finance Ministry approved the proposal for extension after it was submitted. Subsequently, the Financial Institutions Department officially released the notification on Thursday afternoon, August 21.

The notification stated that the Small Investors Support Fund’s validity has been extended from December 31, 2027, to December 31, 2032. Additionally, the deadline for repaying the last disbursed loan has been pushed back from December 31, 2028, to December 31, 2033.

According to the Dhaka Stock Exchange (DSE), there was a significant drop in prices during the last fiscal year due to political instability. However, since July of this year, the market has begun to show signs of gradual recovery, aided by the positive influence of the banking sector and certain fundamental stocks.

Market analysts believe that the extension of the fund’s duration will help restore investor confidence in the market. This action by the government and regulatory bodies is expected to alleviate the concerns of small investors and promote long-term investment.

Intermediary institutions will be able to carry on their investment activities smoothly with the assistance of special funds. This will help mitigate the pressure of sudden share sales and lessen the risk of unwanted market volatility. Overall, the extension of the fund’s duration is anticipated to contribute to sustainable stability in the capital market and further bolster long-term growth trends.