Home ›› 16 Nov 2022 ›› Stock
The Bangladesh Securities and Exchange Commission (BSEC) has allowed investors to buy and sell the listed securities below their existing floor prices in the block market.
The new directive would be put into effect from today, according to an order issued by the stock regulator on Tuesday.
Currently, no listed securities can be traded below their floor prices at the country’s two stock exchanges.
But the securities regulator in its latest move relaxed the condition for block transactions.
Considering the current market situation, the stock exchanges might allow the Block Market clients to buy or sell the listed scrips up to 10 per cent lower than their existing floor prices, subject to maintaining the reference price using the previous closing price on the public or spot market, the yesterday’s BSEC directive read.
The stock market regulator directs the Dhaka Stock Exchange, Chittagong Stock Exchange, and Central Depository Bangladesh Limited (CDBL) to comply with its order.
On July 28 this year, the BSEC reintroduced the floor price for stocks that is still in place, a measure designed to curb the market volatility.
Opening price of any listed security would be set at the average of the closing price of July 28, 2022 and the closing price of the immediately preceding four trading days, as per the BSEC’s existing directive regarding the floor price.
The average price calculated for each security would be considered the floor price and the lowest limit of the circuit breaker, it stated.
The latest action was taken in light of the ongoing global economic strains and to protect the investor interests, the BSEC said.
Previously, the BSEC took a similar step in an attempt to limit the free fall of share prices during the Covid-19 outbreak on March 19, 2020, when the DSEX fell below the 3,000-level.
When a floor price is fixed, no company’s shares can be traded below the fixed price. If the share price of a company is trading at the floor price, then that would be the lowest price of the company.
In addition, the BSEC said the upper limit of the circuit breaker and other existing conditions would remain unchanged.
