BO accounts slump for sluggish stocks trade
Over 0.21 million accountholders drop in 2017
Mohammad Mufazzal | Tuesday, 2 January 2018
The number of active BO (beneficiary owner) accounts declined in 2017, indicating that the traders concerned lost interest in sluggish share business.
According to information from the Central Depository Bangladesh Limited (CDBL), over 0.21 million BO accounts were closed in the calendar year that has just gone by.
Officials of some brokerage firms said the BO accounts dropped as general investors' scope of applying for IPO (initial public offering) shares shut under the revised public issue rules.
They see the non-payment of account-renewal fee, as such, mainly led to closure of the BO accounts in 2017.
The number of active BO accounts was above 2.93 million as of December 2016. At the end of December 31, 2017, the number came down to above 2.72 million--7.0 per cent less than the figure in December 2016.
Of the 2.72 million BO accounts, individuals and companies hold above 1.7 million and 11,762 accounts respectively. The remaining 0.98 million are jointly opened, according to CDBL.
"A significant number of general investors open BO accounts to apply for IPO shares. Their scope of getting IPO shares got reduced after the revising of IPO quota in revised public issue rules," said an official of a brokerage firm.
He said many BO accounts were also closed due to non-payment of renewal fee.
An investor has to pay Tk 450 per annum to keep the account active for trading in stocks on the capital market.
Of the Tk 450, DP gets Tk 100, CDBL Tk 100, government Tk 200 and the Bangladesh Securities and Exchange Commission Tk 50.
Previously, the general investors could apply for 80 per cent shares under the fixed-price method.
As per the revised public issue rules, general investors are eligible for applying for 50 per cent of shares of a company willing to go public under the revised fixed-price method. And eligible institutional investors (EIIs) are allowed to apply for the remaining 50 per cent.
Under the revised book-building method of securities trading, the EIIs are eligible to apply for 60 per cent shares, while non-resident Bangladeshis (NRBs) and general investors for 10 per cent and 30 per cent respectively.