The number of beneficiary owners' (BO) accounts dropped substantially in January-March quarter of the year amid relentless plunge in share prices in recent months.
The total number of active BO accounts came down to 2,578,327 as of March 29, 2020 which was 2,766,217, just three months ago on January 1, according to data from the Central Depository Bangladesh Ltd (CDBL), which preserves electronic data of all individual and institutional investors.
Some 187,890 BO accounts were closed in the just three months due to non-payment of fees, regulatory move and depressed capital market outlook.
To trade in the secondary market and apply for primary shares, an investor has to open a BO account with the CDBL through a depository participant, which is usually a stockbroker or a merchant bank.
The market has been in a downward trend since the last year due to low confidence of investors, liquidity crunch, rising non-performing loan coupled with foreign investors' sell-off.
And the coronavitus outbreak took a heavy toll on stock prices, which prompted securities regulator to impose circuit breaker to curb the free-fall.
DSEX, the core index of the Dhaka Stock Exchange, lost 444 points or nearly 10 per cent in January-March quarter to close at 4,008 on March 25. 2020.
The officials familiar with the development said a good number of BO accounts were closed during the period due to non-payment of maintenance fees, regulatory move taken to ensure compliances and bearish market outlook.
Bangladesh Securities and Exchange Commission issued a circular in June last year to remove irregularities occurred during opening accounts as many BO accounts were opened using same national ID number, mobile number and bank account.
"The depository participants (DPs) had to close many unlawful BO accounts following the BSEC's directive. That's why the number of active BO accounts dropped significantly," the CDBL official said preferring anonymity.
Of the total number of active BO accounts right now, male investors own 1,880,454 accounts while female investors 684,513 and company 13,360 as of March 29, 2020, the CDBL data shows.
Currently, there are 1,635,012 individual accounts and 929,955 joint accounts, the CDBL data shows.
The non-resident Bangladeshis own 145,150 accounts opened to conduct share transactions or to apply for IPO shares. However, half the BO accounts exist in name only.
Those accounts have no role in daily share transactions as they have either zero balance or have never been used in share trading in the secondary market.
This has been happening over the last five years, the CDBL official said.
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