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Floor prices reimposed on 169 cos, mutual funds

Staff Correspondent
01 Mar 2023 18:59:27 | Update: 02 Mar 2023 00:19:03
Floor prices reimposed on 169 cos, mutual funds

The Bangladesh Securities and Exchange Commission (BSEC) has yet again imposed floor prices to contain the free fall of listed securities after the key index dropped below the 6200-point mark due to lower participation from investors amid macroeconomic woes.

In an order issued on Wednesday, the BSEC set floor prices for 169 companies and mutual funds, taking into account their average closing prices from four sessions executed from Sunday to Wednesday.

The regulator has asked the stock exchanges to implement the order starting Thursday.

On December 21 last year, the BSEC lifted the floor price for 169 listed companies and mutual funds. After the move, the lower price change limit for the 169 companies mentioned traded at 1 per cent based on the reference price of the last trading day’s closing price.

Earlier the same year on July 28, the stock market regulator imposed floor prices on all companies for the second time to prevent shares from falling beyond a certain level amid economic woes in the country.

Back in March 2020, the securities regulator took a similar step to limit the free fall of shares following the severe outbreak of the Covid-19 pandemic in Bangladesh, when the DSEX fell below 3,000.

Share prices of most of the companies have been stuck at their floor prices, making investors averse to liquidating their holdings, which in turn triggered a liquidity crunch in the market.

When a floor price is fixed, no company’s shares can be traded below the fixed price. If a company’s shares are traded at the floor price, it would be regarded as the lowest price of those shares.