Investors with Robi IPO in mind flock to Bangladesh market

Bangladesh's capital market is riding high on a wave of potential investments with around 150,000 new beneficiary-owner (BO) accounts opened in the last month.

The upturn has been triggered by the offloading of shares by Robi, the country's second-largest mobile operator, through an initial public offering or IPO, according to market analysts.

Monday was the last day to participate in the subscription process for Robi's IPO worth Tk 5.23 billion. Investors are not eligible to apply for it without a BO account.

The first step to invest in the capital market is to open a BO account under the Central Depository Bangladesh Limited. One can also open a BO account through a brokerage house if they hold a bank account.

According to the CDBL, the number of BO accounts has seen 6.25 percent growth with at least 146,034 new accounts opened in the last 30 days.

As of Nov 23, 2.4 million BO accounts were activated. The figure was 2.3 million a month ago.

The recent surge in BO accountholders is an unprecedented trend, eclipsing the previous monthly high of 28,225 new accounts.

Only 10,193 BO accounts were opened in the same period in 2019.

All BO accounts have been opened in a bid to invest in Robi's IPO, said Rakibur Rahman, director of Dhaka Stock Exchange.

“At least 400,000 new BO accounts were opened when the Grameenphone IPO was initiated. This time, the market added 150,000 new BO accounts."

The latest uptick reverses a downward trend in the number of BO accounts, which had dropped by an average of 19,106 every month last year.

A total of 260,627 BO accounts were closed between Nov 21, 2019 to Aug 24, 2020.

The investments into the IPOs of three companies were required to be submitted within a month.

The subscription for Robi Axiata was scheduled from Nov 17 to Nov 23.

Some new IPOs, including Robi Axiata's, have emerged in the market over the last few days, said Ahmad Rashid Lali, owner of Rashid Investment Services Ltd, a brokerage house. While these had an impact on the surge in BO accounts, it did not match up to Robi's influence on the stock market.