Stock investors rising with new IPOs

A total of 169,741 beneficiary owner (BO) accounts were opened in the first half of this year as IPO investors are gradually becoming active with the issuance of initial public offerings by some new companies.   According to Central Depository Bangladesh Limited (CDBL), 163,281 BO accounts were opened in the first quarter (January-March) of 2013 and 7,360 were opened in second quarter (April-June).   The number of BO accounts increased due to conversion of omnibus accounts into separate BO accounts by the merchant bankers, said a CDBL official, wishing anonymity. About 77,644 accounts were opened by the merchant bankers as on March 30, 2013, he added.      On November 4, 2012, the Bangladesh Securities and Exchange Commission (BSEC) directed the merchant banks to convert omnibus accounts into separate BO accounts by December 31, 2012. Later, the deadline was extended to February 28, this year.    Following the directive, merchant banks rushed to convert omnibus to individual BO accounts, which increased the number in first quarter.     From July 2009 to June 2010, a total of 1.15m BO accounts opened when the market was bullish. But after the debacle in 2010-2011, investors lost interest on market which slowed down the opening of accounts.    “A section of small investors always run after new IPOs and when a company gets BSEC’s nod to go public they open new accounts to participate in large volume,” said a stock broker. He said in every new IPO, we get some new clients.    In the year, 2013 a total of seven companies – Familytex, ICB AMCL Sonali Bank First Mutual Fund, Bengal Windsor Thermoplastic, Orion Pharma, Fareast Finance and Investment, Central Pharma and Exim Bank First Mutual Fund collected money through initial public offering while Bangladesh Building System and Paramount Textile are all set to collect fund as they got regulatory green signal.        “I had 25 BO accounts and opened another 10 ahead of new IPOs,” said Zahedul Hasan, an IPO investor, adding that there is more possibility to get a lot by applying for large volume.    He said in 2009 or 2010, “I usually get two or one lot of share by depositing money through 10 BO accounts, but now it is too tough to get one and that’s why going for large number.       Opening of BO accounts has increased as a group of investors always use the BO accounts to apply for the IPOs, said a merchant banker.