The number of beneficiary owners’ accounts without any share has increased by 63,933 in the last one-and-half month as the Bangladesh Securities and Exchange Commission has not allowed any company to raise fund through initial public offering during this period.
A large number of investors use BO accounts to apply for the IPOs, as no IPO of any company was held after May. ‘That’s why the BO accounts without any share have increased notably,’ a stock broker told New Age recently.
According to Central Depository Bangladesh Limited data, as of April 29 the number of BO accounts without shares was 8.12 lakh which increased to 9.05 lakh as of June 20.
Among the 9.05 lakh BO accounts without any shares in balance, 2.49 lakh accounts had never had any balance after opening, while 6.56 lakh BO accounts had no shares in balance as of June 20.
Due to the sluggish trend in the capital market in the first half of the last year, the BSEC had refrained from approving any company to raise fund from the stock market through IPO. The BSEC again started to allow companies to raise fund through IPO after the market started to increase in August 2012, a senior BSEC official told New Age.
The commission again stopped approving companies to raise fund through primary market following the dullness in the secondary market from February, he added.
The stock market regulator from September 2012 to April this year allowed 15 companies to raise fund from the capital market through IPO which increased the number of BO accounts, a BSEC data showed.
Another CDBL data showed that, a total of 2.04 lakh BO accounts were opened with the CDBL in the first five months of the year.
According to stock brokers, a section of investors always uses the BO accounts to apply for the IPO shares. Following the vibrant primary market they started to activate the BO accounts which were had closed after the market crash in 2011.
Despite increasing trend in the market for the last one-and-half month the increase in BO accounts without shares highlights the dullness in the primary market, they 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 as of the end of 2008-2009, compared to 10.71 lakh as of June 30, 2008. The number of BO accounts was 25.61 lakh as of June 30, 2010.
The investors continued to open BO accounts heavily till April 2011, despite massive slides in share prices from December 2010 to March 2013, 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
