Number of new beneficiary owners' (BO) accounts rose around 8.0 per cent in the just concluded fiscal year (2014-15) compared to the previous fiscal thanks to the rise in the initial public offerings (IPOs).
Some 2,36,104 new BO accounts were opened in the fiscal year 2014-15, as investors were more confident in pouring funds into the primary market rather than the secondary one.
The total number of active BO accounts reached at 3194104 on July 1, 2015, which was around 2958000 on June 30, 2014, according to the Central Depository Bangladesh Limited (CDBL), which preserves electronic data of all individual and institutional investors.
However, the secondary market struggled between bulls and bears throughout the fiscal year. DSEX, the prime index of the Dhaka Stock Exchange (DSE), saw 103 points or 2.30 per cent rise in the outgoing fiscal year.
To trade in the stock 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 stock broker or a merchant bank.
All the investors, who got primary shares through IPO, saw good returns, which encouraged the investors along with the newcomers to participate in the next IPO, said an analyst.
"Beneficiary Owner accounts increased due to rise in initial public offerings in the fiscal year 2014-15. Many small investors always look for risk-free options of making quick profit," he said adding "Guaranteed profit through initial public offerings encouraged the investors to bet on primary shares".
A total of 17 companies floated IPO shares and raised an aggregate amount of fund worth Tk 12.64 billion, including the premium, from the capital market during the fiscal year (FY) 2014-15.
All the IPOs were oversubscribed manifold, as investors rushed for primary shares, expecting good returns from the investment.
The securities regulator - Bangladesh Securities & Exchange Commission (BSEC) recently brought changes in the IPO application process allowing investors to apply for the IPO shares through the BO accounts opened with different brokerage firms.
"The performance of the primary market is relatively good as newly listed companies jumped manifold on their debut trading day, which also encouraged investors to get at least one IPO lot to book short-term profit," brokers said.
Mohammad A Hafiz, former President of Bangladesh Merchant Bankers Association (BMBA) said "As there is no risk in the primary market, the investors showed interest in the primary market".
Many investors open BO accounts only for applying IPOs and they sell shares in the debut trading day and withdraw money from the market, said Mr Hafiz, also a director of AAA Consultants and Financial Advisers, a issue management company.
The number of beneficiary owner (BO) accounts reached highest peak around 3.4 million in March, 2011 as investors rushed to open accounts with different brokerage houses lured by the booming share prices, especially from October to early December, 2010.
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Number of new BO accounts up 8pc in Fiscal Year 15
FE Report | Published: July 02, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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