Number of BO accounts rises in Sept amid stocks’ bull run

Mostafizur Rahman | Published: 22:47, Sep 29,2017


A file photo shows a man monitoring movement of stock prices at a brokerage house in Dhaka. The number of beneficiary owners’ accounts increased by 21,500 in September mainly due to a continued surge in share prices at the country’s bourses. — New Age photo

The number of beneficiary owners’ accounts increased by 21,500 in September mainly due to a continued surge in share prices at the country’s bourses.
The key index of Dhaka Stock Exchange, DSEX, added 436 points in the July-August period of this year.
The increase in the number of BO accounts came after around 2.64 lakh BO accounts were closed in July for non-renewal of the accounts by the June, 2017 timeframe.
The number of BO accounts rose to 26,84,594 as on September 28 from 26,63,000 as on September 5.
Of the new entries, the number of BO accounts owned by female investors was more than 5,000.
Opening a BO account with the Central Depository Bangladesh Limited through a depository participant, which is usually a stockbroker or a merchant bank, is a must for trading shares at the DSE and the Chittagong Stock Exchange.
The number of active BO accounts was 29,26,932 at the end of June, but the figure declined to 26,63,000 on September 5, CDBL data showed.
Of the active 26,84,594 BO accounts as of September 28, 19,61,569 are owned by male investors and 7,11,546 by female investors. The figures were 19,45,681 and 7,06,325 respectively on September 5.
Individual investors operate 16,98,801 BO accounts, investors jointly operate 9,74,314 BO accounts and 11,479 accounts are operated by different companies including institutional investors, the CDBL data showed.
Of the accounts (excluding the company-owned BO accounts), 25,20,546 BO accounts are owned by Bangladeshi investors and 1,52,569 accounts owned by non-resident Bangladeshi investors, the data showed.
Stockbrokers said investors usually open new BO accounts or revive their suspended BO accounts when they find the primary (initial public offering) market vibrant and the secondary market bullish.
The confidence of the investors started to rise from the month of June when the market started to recover its early losses and continuously surged without any major fall, market operators said.
The primary market started to recover from January, 2017 from its dullness in the year 2016. The Bangladesh Securities and Exchange Commission already approved eight companies and two mutual funds to raise fund from the capital market.
The IPO market was dull during the year 2016 following the amendment of the public issue rules in December 2015 with fund raising by the companies from the capital market hitting a six-year low, they said.
Eleven companies raised Tk 858.30 crore through IPOs in FY16 while 16 companies had collected Tk 1,306.97 crore from the market under the same process in FY15.
As a result of a dull IPO market, a large number of investors had refrained from renewing their BO accounts and potential investors had not opened new BO accounts in most of the time before June this year, stockbrokers said.
They said that investors, however, started to renew their existing BO accounts and open new accounts from July, 2017 when the market began recovering.
The DSEX, which was at 5,656 points on June 29, stood at 6,092 points on September 28 including an inter-month high
of 6,240 points on September 17.
In the months of August and September, the core index hit historical highs for several times while the index never came down to below 6,000 points in the month of September.
Currently, an investor has to pay Tk 450 per annum to keep his/her BO account active.
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, lured by the booming share prices, then had rushed to open accounts with different brokerage houses.

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