The Bangladesh Securities and Exchange Commission (BSEC) has removed the floor price for shares of the last six companies, leaving the country's capital market without a floor price. Both the upper and lower circuit breaker limits will now be applicable to all securities, in line with previous orders.
The new regulation, which will take effect on Sunday, affects Beximco Ltd, Khulna Power Ltd, and Shahjibazar Power Co Ltd, with BSRM Ltd, Islami Bank Bangladesh, and Meghna Petroleum Limited following on August 14.
BSEC Chairman Professor Shibli Rubayat-Ul Islam signed the order on Thursday, which was announced on Friday, lifting the floor price on listed securities 18 months after it was imposed to revive the capital market.
Notably, the chairman has not been seen in office since the fall of the Awami League government, and BSEC officials could not confirm where the order was signed.
With this change, the regular circuit-breaker mechanism, in place before the floor prices were introduced, has been reinstated. For newly listed securities, a 50 per cent circuit breaker will apply on the first trading session, adjusting by 50 per cent in the second session, before following the standard limits from the third session onwards.
The floor prices, imposed on July 28, 2022, were initially set to prevent sharp declines amid macroeconomic strains.
On January 18, after the market closed, the regulatory body lifted the floor price for all listed companies and mutual funds, except for 35 companies. This decision met a long-standing demand from stakeholders. However, most shares remained stuck at these levels, leading to investor frustration, liquidations, and a liquidity crisis in the market.
Segueing to this Thursday, investors of the Dhaka bourse experienced a remarkable surge in the market as power transitioned to the interim government, fuelling hopes for good governance in the country’s capital market.
The key index of the Dhaka Stock Exchange (DSE), the DSEX, soared by 306 points, reaching a 4.5-month high of 5,925 points—marking the largest single-day jump as the previous recorded points stood at 5,619.
This rally followed the fall of the Hasina-led Awami League regime on August 5, which sparked a three-day gain of 695 points on the prime index. Market turnover also surged by 107.1 per cent to an approximate six-month high of Tk 1,606 crore, up from Tk 775 crore recorded in the previous session.
According to market insiders, the magical rally was driven by fundamentally strong stocks, as the recent political changes boosted investor confidence. Investors displayed strong buying interest from the session's starting, anticipating political stability after Hasina resigned as prime minister and fled the country.
