• Friday, March 06, 2015

Market saw 5.47 lakh new BO accounts in 2013

Sarwar A Chowdhury

Around 5.47 lakh new BO accounts were opened in 2013, as investors were more confident in pouring funds into the primary market rather than the secondary one.
Guaranteed profit through initial public offerings (IPOs) encouraged the investors to bet on primary shares.
To trade in the stockmarket and apply for primary shares, an investor has to open a BO (beneficiary owner's) account with the Central Depository Bangladesh Ltd through a depository participant, which is usually a stockbroker or a merchant bank.
The number of new BO accounts was higher by 210 percent in 2013, compared to that in 2012, when 1.76 lakh accounts were opened, according to the CDBL, which preserves electronic data of all individual and institutional investors.
However, almost half of the new accounts became inactive during the year, as there was no scrip in the accounts.
At the end of December 2013, the number of active BO accounts came down to 27.96 lakh, which was 24.75 lakh at the end of December 2012.
The pricing of new securities in the secondary market was better last year than the previous year, said Md Moniruzzaman, managing director of IDLC Investments, a merchant bank.

All the investors, who got primary shares through IPO, saw good returns, which he said have encouraged the investors along with the newcomers to participate in the next IPO.
“Although many BO accounts fell inactive, the rising participation in 2013 was a good sign.”
Seventeen new securities got listed on the Dhaka Stock Exchange last year while the number was 14 a year ago.
All the IPOs were oversubscribed manifold, as investors rushed for primary shares, expecting good returns from the investment.
On the other hand, although the secondary market was recovering from the previous two years' downtrend, the DSEX, the key index of the premier bourse, gained only 4.3 percent to close the year at 4,266 points.

Published: 12:00 am Sunday, January 19, 2014

Last modified: 12:12 am Monday, January 20, 2014

TAGS: investors BO accounts Guaranteed profit inactive rising participation secondary market .

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