Sunday, August 30, 2009

Rajshahi investors find new refuge in stocks

Sunday, August 30, 2009

Share trading is gaining popularity in Rajshahi as more people are now investing in stocks.

State-owned Investment Corporation of Bangladesh (ICB) and its subsidiaries, which are providing brokerage services with an aim to help small investors, are now struggling to cope with pressure from a rising number of investors.

Beginning in 1984, ICB roped in around 7,000 investors from northern districts until 2005. Then there was a big jump.

The number of investors increased by 4,600 in only four years to 11,600 after ICB Securities Trading Company Ltd (STCL) and ICB Capital Management Ltd (CML) opened up IT-enabled brokerage services.

The services enabled investors in Rajshahi and its surrounding areas to get direct access and trade on the Dhaka Stock Exchange and Chittagong Stock Exchange (CSE) through internet trading service modules.

Investors -- mostly small and from remote areas -- transacted Tk 108 crore in turnover in the last one and a half month, said Mahmud Mizanur Rahman, deputy general manager of ICB in Rajshahi.

"At least 25 new investors are opening up new accounts daily with ICB, STCL and CML. The average daily turnover in Rajshahi was recorded at Tk 4 crore," said the regional ICB chief.

However, many investors complained that although ICB and its subsidiaries are drawing handsome commissions, they are not increasing manpower, facilities or support for the investors.

Investors have to cram in front of a display terminal in a small room at the ICB branch office. Often they demonstrate inside the ICB itself and burst into protest by forcing their way into the DGM's office.

"A single display terminal for so many investors seriously hampers our access to information on share prices," said M Tozammel Hossain, an investor.

He added only two computers are being used for the internet module to trade on the DSE, while there is only one computer to trade on the CSE.

The computers and internet services often do not function properly due to the pressures of increased trade, but the ICB is yet to develop infrastructure, investors complain.

"We have to risk financial losses as we are not able to trade timely. Only one computer is being used for both purchase and sale orders, delaying the entire process," said Abdullah Al Hussain, demanding separate trading terminals.

Mir Akhtarul Islam Mitul, another investor, said ICB, STCL and CML are selective in providing loans. "Big investors are the preferred group," he alleged.

In the face of growing demand, ICB initiated a Tk 50 lakh project to open a new 1,200 square feet terminal on the fifth floor of Gaffar Plaza, said Mahmud Mizanur Rahman of ICB. The current office is on the first floor of the same building.

"Two more display terminals and a larger space has been arranged on the new floor," said the DGM. "The project is to be completed in months and will create a better environment."

M Shahabuddin Bhuiyan, manager of ICB's Capital Management Ltd, said the increased number of investors is creating extra pressure on the computer servers.

"Despite a fund crunch, we are setting up another server within a few weeks."

Abdul Mottalib, branch in charge of ICB's Securities Trading Company, denied allegations over giving selective loans. He said loans worth around Tk 33 crore were given to the investors.

ICB is running with only 10 staffers, while CML has five. Investors said the number of employees is not enough.

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