The Financial Express

Price erosion ceiling for 66 listed securities reduced

Price erosion ceiling for 66 listed securities reduced

The securities regulator has reduced the price erosion ceiling for 66 listed securities to avert the impact of their price fall on the benchmark index amid the ongoing lockdown.

As per the regulatory decision, the market prices of these 66 securities can decline up to 2.0 per cent instead of existing 10 per cent.

And the upper 10 per cent limit of their circuit breaker remains unchanged and the decision will come into effect from today (Sunday).

The Bangladesh Securities and Exchange Commission (BSEC) on Saturday took the decision following the large fall of broad index observed on Thursday.

The DSE broad index DSEX declined 82.55 points on Thursday mainly because of withdrawal of the floor prices of 66 listed securities.

"Investors are shaky amid the ongoing situation created by fresh infections by the covid. Under such a situation, the BSEC has reduced the lower limit of the circuit breaker for 66 listed securities considering the stakeholders' observations," said the BSEC spokesperson Mohammad Rezaul Karim.

He said the decision of reducing the lower limit of 66 securities to 2.0 per cent from 10 per cent will reduce their impact of price fall on the index.

The securities regulator on Wednesday lifted the floor prices of 66 listed securities to ease the transactions of their shares or units.

On the following day, the DSEX declined 88.55 points mainly because of the withdrawal of floor price of 66 securities.

The BSEC officials said around 25 points of the broad index was declined due to price fall observed by 61 securities whose floor prices were lifted.

The securities regulator withdrew the floor prices of those securities as the transactions of their remained almost stuck at floor prices.

The floor price is the lowest price of the shares of a listed security fixed taking into account the average of the closing prices of immediate preceding five trading days as of March 19, 2020.

The market price of a listed security can't go down below its floor price.

The market insiders said the decision of withdrawing the floor prices of 66 listed securities at a time was not wise one.

"The regulator could have withdrawn their floor prices step by step when the market advanced gradually," said a senior official of a leading brokerage firm.

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