BSEC brings changes in price cap to stop free fall of share prices

Changes have been brought in price cap to stop the ongoing freefall of share prices, says a new order of Bangladesh Securities and Exchange Commission (BSEC), issued Wednesday afternoon.

The price of no enlisted company’s share and mutual fund would fall more than 3 per cent a day, according to the new order. The earlier ceiling was 10 per cent.

The decision, to be implemented at both the share markets in the country from Thursday, has been taken to protect the interests of the bourses and that of the investors, the order added.

Earlier in 2021, the share market regulatory body imposed a floor price (lowest price) of a share to stop the freefall. This imposition led to a stagnation in the market.

In this situation, the stakeholders demanded withdrawing the system as most of the brokerage houses and merchant banks incurred losses due to the stagnation in transaction.

Following discussions, the regulatory body withdrew the floor prices in phases from January this year.

This made the market a bit rejuvenated but indices started falling from February once again. This has been continuing.

The BSEC held a meeting with the stakeholders on Monday and urged them to increase investments in the market. The stakeholders also made a commitment to pump more money into the market. This made the investors hopeful of investment from various organisations.

Despite the commitment, the indices were in red in the two bourses -- DSE and CSE -- on the following days.

The prices fell today, Wednesday, too. DESX, the main index of Dhaka Stock Exchange, declined to 5579-point, a fall by nearly 1 per cent from the previous day. This is the lowest position in the last 35 months.