As many as 2.06 lakh new beneficiary owners’ accounts were opened in the last five months of the year after dull one-and-a-half years.
Opening of beneficiary owners’ accounts against omnibus accounts of merchant banks and desired profit by investors from primary market pushed the total number of BO accounts up, said stock brokers.
Because of the long-term downtrend in the capital market, the number of BO accounts declined to 24.75 lakh on December 31, 2012 while it was around 34 lakh in mid 2011.
According to the latest available data with the Central Depository Bangladesh Limited, the number of BO accounts started to increase in January this year reaching 26.81 lakh till June 1.
Merchant bankers said that most of the merchant banks had already complied with the Bangladesh Securities and Exchange Commission’s directive on opening of BO accounts for every client who was under the omnibus accounts.
Profitability in the IPO market might be another reason behind the increase of BO accounts’ number, they said.
The BSEC on November 4, 2012 asked the merchant banks to transfer all omnibus accounts, which held around 3,000-4,000 investors’ account, to BO accounts through own depository participants by December 31, 2012.
The BSEC on December 30, 2012 extended the deadline to February 28 this year as the merchant banks failed to complete the process of transfer within the deadline.
According to the available data of opening BO accounts from omnibus accounts, ICB principal branch opened 20,415 accounts, ICB Capital Management Ltd 9,124 accounts, ICML Rajshahi branch 6,489, Trust Bank Investment 5,627, ICML Chittagong branch 4,230 and IDLC Investments Ltd opened 4,158 BO accounts for their clients who previously traded through omnibus accounts.
Of the firms which opened lowest number of BO accounts for clients under omnibus accounts, AAA Consultants and Financial Advisers opened 23 BO accounts while both Race Portfolio and Issue Management and Swadesh Investment Management opened 36 BO accounts.
According to stock brokers, a section of investors always use the BO accounts to apply for the IPO shares.
Following the vibrant primary market they started to activate the BO accounts which were closed after the market crash in 2011.
Five companies raised capital through getting listed with the stock exchange in this year. The BSEC in 2011 had allowed 13 companies to offload shares in the capital market through IPOs and 14 in the last year.
Separation of BO accounts for individual investors from the omnibus accounts might be the main reason behind the increase of BO numbers, Alamgir Hossain, a South-East Capital Services Ltd senior executive, told New Age.
Expected profit from the IPOs might be another reason for the increase of BO accounts as a section of investors operates more than two accounts for applying for the IPOs, he said.
Some investors who kept them out of the trading started to activate their accounts following the upbeat trend of market in January-February, the stock brokers said.
In 2009-2010, 11.60 lakh BO accounts were opened, posting an 82.83 per cent year-on-year growth, and the number of BO account holders were 14.01 lakh at the end of 2008-2009, compared to 10.71 lakh on June 30, 2008. The number of BO accounts was 25.61 lakh on June 30, 2010.
The investors continued to open BO accounts heavily till April 2011, despite massive slides in share prices from December to March, with the number of BO accounts reaching around 34.00 lakh.
But in the fag-end of the 2010-2011 fiscal year investors seemed to lose interest in opening BO accounts when around three to four lakh BO accounts were closed as investors did not renew their accounts.
-With New Age input
