DSE considering using MFS accounts to bring in new investments
The Dhaka Stock Exchange (DSE) is considering setting up beneficiary owner (BO) accounts for people with mobile financial services (MFS) accounts but no traditional bank accounts, so as to increase new investments and the number of investors in the country's capital market.
"Even those who have no regular bank account needed to open a stock market BO account, mandatory for share trading, would be able to invest in the stock market with their bKash or Nagad accounts," said Tarique Amin Bhuiyan, managing director of the country's premier bourse.
"Many people have funds but cannot invest in the stock market because they do not have a bank account," he added.
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He made the remarks on Monday at 3i Securities Limited's inaugural share trading ceremony. 3i Securities is a new generation brokerage house.
Under a demutualisation programme, the DSE recently issued trading right entitlement certificates (TRECs) to 58 new entities and 3i Securities is the first of them to launch share trading.
Monarch Holdings of the world's top cricket all-rounder Shakib Al Hasan will start trading stocks on Tuesday.
Tarique Amin Bhuiyan said it is very important to link MFS accounts with BO accounts.
"Many do not open a bank account but everyone has a mobile financial services account through which stock transactions are possible. We want to seize this opportunity," he added.
The DSE managing director termed the launch of share trading through a new generation brokerage house 'a new chapter' and expects the new brokerage firms will bring new investors to the capital market.
He said market capitalisation is 20% of the country's gross domestic product, though the capital market is not growing at the rate at which the GDP is growing. The size of the economy is $409 billion while market capitalisation is close to $70 billion.
"We are trying to increase both local and foreign investments in the market. Many farmers now have investable funds but no financial literacy. The capital market is now at the city level, but we will also go to the village level," said Tarique Amin Bhuiyan.
Istak Ahmed, the owner of 3i Securities said, "Usually, investors are not advised by brokerage houses but we will provide investment suggestions based on our own research."
"We will bring in new investors, and funds from big entrepreneurs too, which will all play a role in the country's capital market and the economy," he added.
