If the account holders want to buy IPO shares, they must invest Tk864 crore jointly in the secondary market
AN OVERVIEW OF BO ACCOUNTS
- Total 25.57 lakh BO accounts
- Among them, more than 15 lakh are active
- 4.34 lakh participate in IPOs only
- 6.17 lakh are inactive
As investments in the primary market are risk-free, a section of investors only opt for shares in initial public offerings (IPOs).
After getting shares through a lottery, such investors, unwilling to take any risk, sell their shares in the secondary market with a good profit, and again they wait for new IPOs.
Thus more than 4.34 lakh or 17% of the total beneficiary owner (BO) accounts are used for IPO subscription only.
Recently, Bangladesh Securities and Exchange Commission (BSEC) has issued a directive making it mandatory for investors to have at least Tk20,000 investment each in the secondary market to apply for IPO shares.
A top official at a brokerage house said if these BO account holders comply with the regulator's guideline, the stock exchanges will get an investment of around Tk864 crore in the secondary market.
Currently, these BO accounts are empty, as per the Central Depository Bangladesh Limited (CDBL).
CDBL is an umbrella to operate electronic shares to settle and transfer securities through computerised book-entry systems.
CDBL data shows that as of 5 January 2020, the number of BO accounts was 25.57 lakh.
Of the total accounts, more than 15 lakh are active.
Despite having shares, 6.17 lakh BO accounts are inactive which did not have any transactions of shares for a long time.
Sources said that the equity of these accounts are negative and the account holders did not buy or sell shares for a long time.
The BSEC directive on IPO allotment will be effective from 1 April and every general investor will get primary shares in the proportion of their offer amount instead of the existing lottery system.
Every investor has to apply with at least Tk10,000 or its multiples for IPO shares.
In the last three months of 2020, the number of BO accounts rose by 2.66 lakh.
At the end of June last year, more than 2 lakh BO accounts were closed for not renewing with a payment of Tk500 fee for each.
General investors hold 99% or 25.44 lakh and companies 13,880 of the total 25.57 lakh BO accounts.
Of the general investors, 1,882,125 are male and 661,748 are female.
The number of individual BO accounts is 1,633,195 and the number of joint accounts is 910,678.
The number of non-resident account holders is 155,920.