A total of 1,37,464 beneficiary owners’ accounts were closed in the last one and a half months due mainly to non-payment of annual account renewal fees by the accountholders.
A prolonged downward trend at the market was also a factor, sources said.
The number of active BO accounts was 28,45,026 on May 31, but the figure declined to 27,07,562 on July 15, 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 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. But the impact of the reduction was not significant.
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 17,09,730 BO accounts, investors jointly operate 9,84,631 BO accounts and 13,201 accounts are operated by different companies, the CDBL data showed.
Of the accounts (excluding the company-operated BO accounts), 25,36,601 BO accounts are owned by Bangladeshi investors and 1,57,760 accounts by non-resident Bangladeshi investors, it showed.
Of the 26,94,361 accounts, 19,77,616 are owned by male investors and 7,16,745 by female investors.
The market was mostly bearish in last financial year of 2018-19 with lower participation of investors that also made some investors reluctant to renew their BO accounts.
The stock market has also been sluggish since January this year due mainly to the volatility in the financial sector amid rising non-performing loans and liquidity crisis in the banks.
Market operators said the non-payment of the annual account renewal fees by June 30 was the main reason for the closure of the accounts.
They said some investors were reluctant to maintain their BO accounts as the BSEC had cut IPO quota facility for the general investors.
However, the commission on July 16 increased IPO quota for the general investors by 10 percentage points.
As per new public issue rules, the IPO quota facility for the general investors has been raised to 50 per cent from 40 per cent under the fixed price method of IPO and it has been increased to 40 per cent from 30 per cent under the book building method.
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 FY19 despite an increase in the number of IPOs issued in the period.
As a result, a section of 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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