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Share trading on OTC market remains dull

FE Online Report | Published: June 06, 2019 15:08:18 | Updated: June 10, 2019 10:45:14


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Share trading on the over-the-counter (OTC) market of the premier bourse remained sluggish since its launching nearly ten years back, causing only sufferings to some investors.

During the eleven months of the current fiscal year (between July 01, 2018 and May 30, 2019) about 29.93 million shares worth Tk 653 million were traded in the OTC market, according to data from the Dhaka Stock Exchange.

In the fiscal year (FY) 2017-18, about 13.77 million shares were traded on the OTC trading floor, generating a turnover of Tk 800 million.

Shares of the companies which were de-listed from the main trading floor, are traded on the over-the-counter (OTC) market.

The Bangladesh Securities and Exchange Commission (BSEC) launched the OTC market on September 06, 2009 in an effort to facilitate the trading of de-listed companies.

Currently, 65 companies are listed with the OTC market.

Market operators said the OTC market of the DSE has remained sluggish since was launched ten years back.

Md Hasan, a small investor, said he could not sell even a single share in the outgoing year. “It’s a buyer-less market.”

Another investor said he has about Tk 0.10 million shares on the OTC market but failed to trade due to a complicated system.

He alleged that buyers do not show interest in purchasing stocks due to inconvenient selling procedure.

He urged the securities’ regulator to make the transaction process easier and more functional.

An official at the OTC market said the investors were losing interest in stock trading on the OTC market as they considered it risky.

“Besides, they are confused over whether the stocks could be re-sold or not on the market.” he said.

To protect the investors’ interest, the securities’ regulator should reconstruct the board of directors of the companies under the OTC market or appoint administrators in the companies as soon as possible, said an analyst at a leading brokerage firm.

Meanwhile, the securities’ regulator BSEC has taken an initiative to make the OTC market vibrant through reforms of rules.

A DSE official said the securities’ regulator and the prime bourse are working on how to improve the OTC market.

As on May 30, the last trading day before Eid holidays, the market capitalisation of the OTC market stood at Tk 10.47 billion with its shares numbering 562.23 million.

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