More than 3,000 investors have offloaded all their shares, closed their beneficiary owners (BO) accounts, and left share trading in just four working days last week.
An analysis on the BO account data of the central depository Bangladesh limited (CDBL) revealed the scenario. The CDBL is a regulatory agency that records and facilitates the trade of securities in Bangladesh.
As a new fiscal year – 2024-25 – began on Monday, the share market shifted to an upward trend last week, with a rise in indices and turnover. The key index of the Dhaka Stock Exchange (DSE), DSEX, rose by 142 points in the week’s four trading days, while the average turnover increased by nearly 10 per cent to Tk 6.16 billion.
Still, a significant number of investors have found it better to leave the market.
According to the CDBL, the number of BO accounts with shares was 1,305,751 on 30 June, the last day of the previous fiscal year, and it declined to 1,302,346 on 4 July, the last working day of the previous week. A total 3,405 BO accounts were closed as investors concerned sold off all their shares during the four days.
As per rules, a BO account needs to be updated every July through payment of an annual maintenance fee. Investors who are unwilling to pay the tax sell off all their shares and close the BO accounts, which eventually reduces the number of active BO accounts in the market.
At the end of last week, the number of active BO accounts in the stock market fell by around 4,000 to 1,771,125 from 1,775,146 on 30 June. A total of 4021 BO accounts were closed during the last four trading days.
Market analysts said there has been a prolonged recession in the stock market. The DSEX index dropped by 1,015 points or 16 per cent in the last fiscal year, falling from 6,343 points to 5,300 points. The declining trend is prompting the investors to leave the market at their convenience.
A large number of investors could not offload their shares due to the floor price system for a long period of time. As it was lifted gradually from 19 January, they took it as an opportunity to sell their shares, even at a loss, and exit the market.
According to CDBL sources, there has been a growing trend among investors to close their BO accounts without paying the annual maintenance fees. The exact number of investors who have closed their BO accounts will be available at the end of July.