Unutilised BO accounts soaring on ailing stocks
Stock investors are becoming inactive due to ailing stocks and lack of confidence, so the number of unutilised and zero balance beneficiary owners’ (BO) accounts is soaring.
Some 4.96 lakh BO account holders, or 17.66 percent, have not utilised their accounts to trade shares last fiscal year, according to the Central Depository Bangladesh Limited (CDBL).
The number was 4.24 lakh, or 15.33 percent, and 4.09 lakh, or 13.75 percent, in the previous years.
Furthermore, the number of zero balance BO accounts also rose. For instance, some 10.40 lakh accounts, or 37.19 percent, have no shares at all out of a total of 28 lakh BO accounts as on June 30.
The number of zero balance BO accounts was 10.30 lakh, or 37 percent, the previous year.
As the stock market is dull and prone to manipulation, wealthy people are not coming to the market, said Abu Ahmed, a stock market analyst. “If the market is not lucrative then why will they be attracted?”
A stock broker said the number of share investors is low in the market. Moreover, many of the investors leave the market every year.
Investors became inactive in the last three years due to huge loss on their portfolio and dull index.
DSEX, the benchmark index of the DSE, is still below 4,700 points and the turnover is hovering between Tk 330 crore and Tk 350 crore on an average.
Another stock broker said most of the zero balance and unused BO accounts were opened for applying to get shares through the initial public offerings (IPO) only.
Almost all the stock investors maintain several accounts so the number of stock investors is nowhere near 28 lakh.
The number of BO accounts with shares is the real number of stock investors more or less, he added.
There are 12.73 lakh BO account holders with shares, according to CDBL data.
This means, only 0.78 percent of Bangladesh’s population invests in the stock market, whereas it is 2 percent in India and much more in other South Asian countries.
If the listed companies follow good corporate governance and stock market regulator can ensure good governance then more people will come, said Ahmed, also a former chairman of the economics department of the University of Dhaka.
At present, the total number of BO accounts is 25.68 lakh.
