Over-the-counter share trading jumps 99pc

Although the prime index of Dhaka Stock Exchange (DSE) dived 14 per cent year on year in 2018, share transactions on the OTC market jumped 99 per cent in the outgoing calendar year.

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) formally 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.

Between January 01 and December 27, 2018, about 21.69 million shares worth over Tk 703 million were traded in the OTC market.

In 2017, about 10.88 million shares were traded in the OTC trading floor, generating a turnover of Tk 728 million.

However, total turnover fell slightly by 3.43 per cent year on year in 2018 to Tk 703 million and the transaction executed on the OTC market is still insignificant, compared to single-day transactions on the prime bourse.

While the daily turnover on the main trading floor stood at Tk 5.52 billion on an average in 2018, the OTC market witnessed a total turnover worth only Tk 703 million in 2018.

Market operators said the OTC market of the DSE remained sluggish since its launching nine years back, causing only sufferings to some investors.

Shariful Islam, 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 that he has about Tk 1.10 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.

The BSEC also formed a three-member committee to prepare a report on possible changes of rules for the OTC market.

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

The total market capitalisation of the OTC market stood at Tk 9.91 billion as on Thursday, the last trading day of 2018, while the total number of shares in the OTC market is 562.23 million.

[email protected]