Economic Reporter :
More than 100,000 investors have withdrawn every share from their beneficiary owner’s accounts since the beginning of 2024 amid prolonged falling prices in the country’s capital market.
The number of BO accounts with zero share balance on January 1 was 296,901, which increased to 398,785 till Sunday, according to Central Depository Bangladesh Limited data.
The number of total BO accounts on Sunday was 1,788,244, while total operable BO accounts stood at 1,773,551 accounts on January 1.
Opening a BO account with the CDBL through a depository participant, which is usually a stockbroker or a merchant bank, is a must for trading shares at the Dhaka and Chittagong stock exchanges.
The DSE market capitalization also fell by Tk134,473.40 crore during this period.
Market operators said that the persistent drop in share prices on stock exchanges led to investor frustration, panic and losses, intensifying concerns about the capital market.
The total market capitalization on January 1 was Tk780,823.41 crore, which decreased to Tk646,350.01 crore as of Sunday.
Market operators said that lack of confidence among investors, rising interest rates, poor performance of the listed companies along with other issues were impacting the market negatively.
Rumours about the National Board of Revenue imposing capital gains tax raised concerns, which turned into disappointment after the finance minister proposed the capital gains tax on general investors on June 6 while placing the budget proposal at the Jatiya Sangsad, traders said.
They said that continued depletion of the country’s foreign exchange reserves also took a toll on the investors’ mind, and the devaluation of the taka against the US dollar might worsen the situation.
According to Bangladesh Bank data, foreign investment in the country’s capital market halved over the past two years.
Market operators also said that the Bangladesh Bank’s decision on increasing repo rates, which might lead to interest rate hikes on the money market, also impacted the capital market negatively, as investors might shift funds to banks.
Since January 1, DSEX, the key index of the Dhaka bourse, has lost a total of 995.74 points to stand at 5,247.13 points on Sunday.