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A prolonged bearish spell in Bangladesh’s capital market is pushing investors out, leaving a growing number of beneficiary owner (BO) accounts empty.

Data from Central Depository Bangladesh Ltd show that zero-balance BO accounts climbed to 380,297 on March 25 from 367,423 at the end of December—an increase of 12,874 in just তিন months.

This means more than 23% of the country’s 1.65 million active BO accounts now hold no equities, highlighting a sharp retreat by retail investors.

Market insiders say persistent macroeconomic pressures, weak returns in both primary and secondary markets, and global uncertainties have eroded investor confidence. Many investors have chosen to exit—even at a loss—rather than stay exposed to a sluggish market.

Some investors, however, are consolidating holdings into fewer accounts as a defensive move.

Weak returns, IPO drought weigh on sentiment

Analysts point to a lack of quality investment options and an absence of new initial public offerings (IPOs) as key reasons behind the declining participation.

A market analyst said weak returns and the prolonged IPO drought have significantly dampened investor interest. “No new investors are entering, while many existing ones are withdrawing funds—even at a loss,” he noted.

He added that a large number of BO accounts were originally opened to participate in IPOs. With no new listings in the past দুই years, many investors see little reason to keep accounts active.

Limited investable stocks and poor performance of fundamentally strong companies have further discouraged participation.

Shift to safer assets

Higher yields on government securities, particularly treasury bonds, are drawing funds away from equities and tightening market liquidity.

A leading stockbroker said stocks have become less attractive compared to other financial instruments in the current environment.

The decline in active BO accounts began প্রায় দুই years ago, partly after the introduction of mandatory minimum investment requirements for IPO applications—a policy that unintentionally discouraged small investors.

Additionally, the annual maintenance cost of a BO account—around Tk 1,500 including bank charges—has prompted many small investors to close or abandon accounts.

Regulator steps fail to lift mood

Regulators have recently scrapped the minimum investment requirement for IPOs and reduced BO account maintenance fees to Tk 150 from Tk 450 to revive participation.

Still, the market remains under pressure due to inflation, currency depreciation, and volatile energy prices, which have squeezed corporate earnings and limited returns.

Geopolitical tensions in the Middle East have also added to investor caution, raising concerns over rising costs and fresh economic challenges.

Market rises, confidence lags

Despite the outflow of retail investors, the benchmark index at the Dhaka Stock Exchange rose 9%—or 451 points—over the past three months to close at 5,316 on March 25, supported by post-election optimism.

Market capitalisation increased by Tk 200 billion to Tk 6.98 trillion during the same period, while total BO accounts edged up slightly to 1.65 million.

However, analysts say the index gains have not translated into broad-based confidence, as reflected in the rising number of empty accounts.

At its peak during the IPO boom in 2015, BO accounts hit 3.20 million. The current trend tells a different story—one marked by caution, consolidation, and a steady investor retreat.