The Bangladesh Securities and Exchange Commission on Saturday set the downward price change circuit breaker at 2 per cent for 66 companies after the withdrawal of floor prices of shares of the companies resulted in a plunge in share prices of most the companies.
On April 7, the commission withdrew the floor prices of shares of the 66 companies.
Out of the 66 companies, share prices of 61 companies declined while 40 of them hit the circuit breaker in terms of price fall on April 8.
The core index of Dhaka Stock Exchange, DSEX, lost 82 points on April 8 due mainly to the floor price withdrawal.
Before Saturday’s decision, the circuit breaker for the companies was around 10 per cent in both the downward and upward price changes.
The BSEC on Saturday issued an order regarding the matter and asked the DSE and the Chittagong Stock Exchange to execute the order from today.
According to the order, the commission directs the Dhaka and Chittagong stock exchanges to impose standard downward price change limit (circuit breaker) of 2 per cent based on reference price or previous day’s trading price to the list of 66 companies.
However, the upward price change circuit breaker for the companies will remain unchanged at 10 per cent, the order said.
So, share prices of the companies could increase by maximum 10 per cent but could fall by 2 per cent on each trading day.
Earlier on March 19, 2020, the BSEC introduced the floor price system to bar share prices of listed companies from falling below a certain level amid the COVID-19 outbreak.
BSEC officials said that the commission picked the 66 companies for the floor price withdrawal as shares of the companies were being traded below Tk 50 each and share prices of the companied had remained stuck in their respective floor prices for months.
They said that the commission waived the floor prices of the 66 companies to increase the liquidity flow to the market.
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