Stocks
19 Days See 15K BO Accounts Liquidated
During May, a mere 19 trading days saw nearly 15,500 investors liquidate all their shares in their Beneficiary Owners (BO) accounts. Concurrently, 8,000 new investors opened BO accounts and joined the market.
This data, sourced from Central Depository Bangladesh Limited (CDBL), which manages the BO accounts and automates the shareholding process for stock market investors, paints a concerning picture.
According to CDBL, the number of zero-share BO accounts stood at 3 lakh 68 thousand 435 on April 30. By the end of May, this figure had increased to 3 lakh 83 thousand 928 indicating that 15 thousand 493 investors sold off all their shares during the month.
The rise in zero-share BO accounts has led to a decline in active BO accounts, those holding shares. As of the last trading day in May, the number of active BO accounts had decreased to 13 lakh 30 thousand 329 down from 13 lakh 43 thousand 639 at the end of April. Active BO accounts are defined as those holding shares and participating in the market.
According to data from the Dhaka Stock Exchange (DSE), out of the 19 trading days in May, the market experienced a decline on 14 days. This downturn affected the prices of most traded shares, with many companies facing a scarcity of buyers. To curb the falling prices, the Bangladesh Securities and Exchange Commission (BSEC) set a maximum daily price drop limit of 3% in April.
Due to this limit, a significant number of investors rushed to sell their shares at 3% lower prices as soon as the market began to fall each day. As a result, many companies’ share prices dropped by 3% at the start of trading, leaving no buyers for these shares.
Market insiders believe this situation arose due to the continuous decline in share prices. Panicked investors are selling shares to minimize losses, while lending brokerage houses and merchant banks are forcefully selling shares, known as “forced selling,” to adjust loans. Consequently, the number of zero-share BO accounts is increasing day by day.
As share prices continue to fall, forced selling also rises. According to regulations, when a share price drops below a certain limit, lending institutions can sell the shares in the investor’s BO account to adjust the loan. This process is known as forced selling in the stock market.
DSE data reveals that the main index of DSE dropped by 333 points or 6.5% overall in May. The DSEX index stood at 5,585 points at the beginning of May and fell to 5,252 points by the last trading day on Thursday. This decline has led to an increase in the number of zero-share BO accounts. According to CDBL, about 16,000 investors sold all their shares in April as well. Therefore, in the past two months, approximately 31,500 investors have sold all their shares from their BO accounts.
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
