Around three lakh new Beneficiary Owners’ accounts, through which investors take part in stock market trading, have been opened in the last two months, said the chief executive of the Dhaka Stock Exchange. ‘The number of BO accounts has increased to around 17 lakh on September 10 from 14 lakh two months earlier,’ said Salahuddin Ahmed Khan on September 15. The growth reflects the increased awareness of the people about stock market investment, he said.

‘The growth in BO accounts is certainly a positive sign for the country’s capital market,’ said Abu Ahmed, professor of economics at Dhaka University and also a stock market expert. A new generation of investors is entering the stock market and their participation will certainly help to boost the market, he said. He said that at the beginning most of the new BO accounts might be used only to participate in the initial public offerings, but in the course of time a good number of account holders would be turned into regular investors.

Once the new investors get involved in the market, they will also help it to get more attention from the policy-makers, said the expert. Recently more people and business firms are looking on the stock market as an investment option, he said. It is significant that there has been significant growth in the number of investors though the SEC recently tightened BO accounts rules, he said. As per new rules, if an applicant makes more than two applications for IPO, the whole or part of application money may be confiscated by the SEC and all applications will be treated as invalid and will not be considered for allotment purpose.

As per the rules, an applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. Currently most of the BO accounts are used only to participate in the IPOs, sources said. The SEC also set the month of September for paying Tk 300 as annual fee for maintaining a BO account. The regulatory body will cancel or freeze any BO account from October 1 if the account holder fails to pay the fee by the deadline, said SEC sources.

The BO accounts without a share will be closed automatically if the account holders fail to pay the fee by the deadline, said sources. Salahuddin said the development of the capital market depends on the growth in the supply of shares and in the number of shares and investors. In the present context, the supply of shares should be increased to meet the growing demand for shares. Currently, on an average 26,000 investors take part in trading per day at the DSE, said Salahuddin. ‘Their number is rising day by day.’