A total of 1,14,853 beneficiary owners’ accounts were closed in July due mainly to non-payment of annual account renewal fees by the accountholders.
The number of active BO accounts was 27,64,387 at the end of June, but the figure declined to 26,49,534 on July 26, Central Depository of Bangladesh Limited data showed.
Of the annulled BO accounts, most of them became void as the accountholders failed to pay the annual fees by the
June 30 deadline set by the CDBL.
Opening a BO account with the CDBL through a depository participant, which is usually a stockbroker or a merchant bank, is a must for trading shares at the Dhaka and Chittagong stock exchanges.
In 2016, the Bangladesh Securities and Exchange Commission reduced the renewal fee to Tk 450 from Tk 500 for each BO account with the aim of reducing financial burden on investors.
Of the Tk 450, the CDBL gets Tk 100, while the government, DP and BSEC get Tk 200, Tk 100 and Tk 50 respectively.
Of the current active BO accounts, individual investors operate 16,76,556 BO accounts, investors jointly operate 9,61,035 BO accounts and 11,943 accounts are operated by different companies including institutional investors, the CDBL data showed.
Of the accounts (excluding the company-operated BO accounts), 24,80,412 BO accounts are owned by Bangladeshi investors and 1,57,179 accounts by non-resident Bangladeshi investors, it showed.
Of the 26,49,534 accounts, 19,35,803 are owned by male investors and 7,01,788 by female investors.
The BO account opening declined for last three consecutive years.
The number of active BO accounts was 26,57,240 as of July 31, 2017 after the CDBL closed BO accounts for non-payment of maintenance fees in the year.
The market was mostly bearish in last financial year of 2017-18 with lower participation of investors that also made investors quiet at the capital market.
Officials of different brokerage houses said the non-payment of the annual account renewal fees was the main reason for the closure of the accounts as June 30 was the last day to renew the accounts.
The IPO quota for the general investors has been reduced in the revised public issue rules that narrowed the chance of IPO winning for the general investors and made them reluctant to maintain their BO accounts.
Under the revised fixed price method, the general investors are eligible to apply for 50 per cent of the shares of a company going public, which was 80 per cent previously.
Under the book building method, the general investors can apply for only 30 per cent of IPO shares.
Many investors open BO accounts only for getting returns from the primary market subscribing IPO shares, market operators said.
They said the primary market was not vibrant enough in FY18 despite a slight increase in the number of IPOs issued in the period.
As a result, investors were reluctant to renew their accounts, they said.
The number of BO accounts reached its peak at around 34 lakh in the fiscal year 2010-11, the year of market bubble-burst, as people rushed to open accounts with different brokerage houses lured by the booming share prices, especially from October to early December, 2010.
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