The over-the-counter (OTC) market of Dhaka Stock Exchange (DSE) is running sluggish since its launching seven years back, causing only sufferings to some investors rather than relieving them.
The Bangladesh Securities and Exchange Commission (BSEC) formally launched the OTC market on September 6, 2009 in an effort to facilitate the trading of de-listed companies.
The situation has intensified the sufferings of the investors who became victims of junk shares with the stock market debacle in late 2010, said an analyst.
The shares of the companies, which were de-listed from the main trading floor, are traded on the OTC market.
Only 8.42 million shares worth Tk 78.71 million have so far been traded in the outgoing fiscal year (FY) 2015-16 in the OTC market as investors showed little interest in the market, a separate trading floor for junk companies' shares.
In the fiscal year 2014-15, some 33.40 million shares were traded in the OTC trading floor, generating a turnover of Tk 354 million.
"Transaction executed on OTC market in the outgoing fiscal year is very insignificant compared to single-day transaction observed by the main bourse," said a DSE official.
Daily trade volume observed by the premier bourse is around Tk 4.34 billion in the just concluded fiscal year, whereas the OTC market observed a total trade value worth only Tk 78.71 million during the FY 2015-16.
Mohammad Hafizur Rahman, a small investor, told the FE that he could not sell even a single share in the outgoing fiscal year. "It's a buyer less market," he said.
Another investor said that he has around Tk 1.25 million shares in the OTC market, but failed to sell due to complex system. He alleged that the buyers do not show interest in purchasing stocks due to inconvenient selling procedure.
An OTC market official said the investors lost their interest in stocks traded under OTC market as they considered those risky. "Besides, they are confused whether the OTC stocks could be re-sold or not," he said.
Under the OTC system, interested buyers and sellers of shares of non-performing and under-performing companies will announce prices and numbers of shares to be traded. Transaction will take place if the announced prices of buyers and sellers match.
In 2012, Bangladesh Securities and Exchange Commission (BSEC) had taken a move to revitalise the market by forming a four-member panel to find ways to develop the OTC market. The committee also submitted the guideline to the commission in due time. But there is no visible progress since then.
A BSEC official said the commission could not implement the committee's recommendations due to shortage of manpower.
Currently, 66 companies are being traded at the OTC market which started with 51 companies on September 6, 2009.
"To protect the investors' interest, BSEC should reconstruct the board of directors of the companies under OTC market or appoint administrators in the companies," said Akther H Sannamat, a capital market analyst.
He also suggested introducing bargaining option to revitalise the OTC market.
DSE in co-operation with BSEC may make laws and rules easier for liquidation of OTC market's companies. That will relieve the investors from the agonies of keeping the shares of ill-fated companies, said an analyst at a leading brokerage firm.
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