Bangladesh Army International University

of Science and Technology

(BAIUST)

Bank Fund Management

Course Code: FIN 4811

Fatema Tuz Zuhora Tarin

Lecturer, Finance, Bangladesh Army International
University of Science & Technology.
 Nur E Fahim
Mahfuza Nur
Esty
4110022
4109013

Tahomid Uddin Hanin sultana

4110046 4110047

Sumit Mondal Jafrina Afroj

4110053 4110078
Money market basically refers to a section of the
financial market where financial instruments with
high liquidity and short-term maturities are traded.
Money market has become a component of the
financial market for buying and selling of securities
of short-term maturities, of one year or less, such
as treasury bills and commercial papers.
 Capital markets refer to the venues where
funds are exchanged between suppliers and
those who seek capital for their own use.

Suppliers in capital markets are typically

banks and investors while those who seek
capital are businesses, governments, and
individuals.
 Money Capital
Market Market

They pay interest, but some Bring buyers and sellers

issuers offer account holders together to trade stocks,
limited rights to occasionally bonds, currencies, and
withdraw money or write other financial assets.
checks against the account.
 Bankers’ Acceptance, Government Bonds, Treasury bills, Repurchase
Agreements, Commercial paper, Certificate of Deposit, Banker’s Acceptance.
Merits/Advantages
They are practically like a
bank account with higher
interest rates. We can
earn considerably higher
amounts of interest on a
money market fund than
on a regular savings
account due to the low-
risk nature of these
funds.
Demerits/ Disadvantages
High liquidity also means
volatile opportunities. If
the instruments that
these funds invest in are
withdrawn or cancelled
in their term, the money
market fund could lose
the invested money very
quickly and customers
can even lose their
invested capital.
Merits/Advantages Demerits/ Disadvantages

• No legal obligation to • Expensive source

pay fixed dividend of finance
• Provide long term • Dividend is not tax
capital deductible
• Do not carry voting • Market price of
rights so no dilution shares keep
of control fluctuating
• Superior security over • Rate of dividend is
equity shares generally low
Current Scenario of Investment Portfolio of Banking Industry.
Banks in Bangladesh typically invest in both money
market and capital market portfolios.

Money market investments

include short-term, highly
Money
liquid assets like treasury
Market So they usually allocate
bills, certificates of deposit,
and commercial papers. investments across both
money market and capital
market instruments based
on their risk appetite and
Capital market investments
investment strategies.
involve longer-term
Capital securities such as stocks,
Market bonds, and mutual funds.
Banks diversify their
portfolios to manage risk
and optimize returns.
 Where Bangladesh Bank is investing more capital market or money market?

Money Market Capital market

The primary issues and

The money market secondary trading of
comprises banks and equity securities of capital
financial institutions as market take place through
intermediaries, 20 of them two (02) stock exchanges-
are primary dealers in Dhaka Stock Exchange
treasury securities. and Chittagong Stock
Interbank clean and repo Exchange. The
based lending, BB's repo, instruments in these
reverse repo auctions, BB exchanges are equity
bills auctions, treasury bills securities (shares),
auctions are primary debentures and corporate
operations in the money bonds. The capital market
market, there is also active is regulated by
secondary trade in treasury Bangladesh Securities and
bills (upto 1 year maturity). Exchange Commission
(BSEC).