Regulator frees all but Beximco, Islami Bank of price restrictions

The securities regulator on Wednesday removed all price restrictions from all but two stocks -- Beximco and Islami Bank Bangladesh.

It changed the lower circuit breaker back to 10 per cent from 3 per cent, allowing correction of all stocks up to 10 per cent a day, except for the two stocks. Beximco and Islami Bank still have floor price imposed on them.

However, all stocks will be allowed to enjoy daily appreciation up to 10 per cent, as per the standard practice.

The Bangladesh Securities and Exchange Commission (BSEC) on Wednesday took the decisions at an urgent meeting chaired by the newly-appointed Chairman Khondoker Rashed Maqsood.

The floor price of six companies -- Beximco, Khulna Power Company, Shahjibazar Power and Company, Islami Bank, BSRM, and Meghna Petroleum -- was effective until Wednesday.

Preferring anonymity, a BSEC official said the regulator had not removed floor price from two companies because of a confidential reason. "The regulator will let people know the reason at the right time."

The meeting also decided to take legal actions against the companies that had failed to distribute declared dividends within the stipulated time.

"This move is intended to restore the confidence of investors," said new BSEC spokesperson Farhana Faruqui.

In May 2023, the securities regulator identified 15 companies that failed to disburse dividends for FY22.

BSEC officials said many of those companies had not yet deposited dividends into the shareholders' accounts and the matter was placed before the enforcement department to decide the next course of actions.

As per the rules, a listed company is required to complete the distribution of dividends within 30 days after declaration.

Meanwhile, the securities regulator discontinued the appointment of cricketer Shakib Al Hasan as the brand ambassador of the BSEC.

He was appointed as brand ambassador in 2017 as part of the regulatory move to conduct a countrywide financial literacy awareness programme.

A BSEC official said cricketer Shakib became controversial for his "unethical involvement" in activities, including investments in the capital market.

"We've also received written complaints against him," the official said.

The stock market regulator also scrapped the proposed memorandum of understanding (MoU) with National Telecommunication Monitoring Center (NTMC).

The immediate past chairman Prof Shibli Rubayat-Ul Islam had attempted to get government approval earlier this year to bring voice calls and internet data of stock market investors under surveillance.

The former chairman had sent a letter to the Financial Institutions Division seeking permission to sign a MoU with NTMC, which stakeholders see as a breach of privacy.

The NTMC is the state's communication interception and intelligence agency operating under the Public Security Division of the Ministry of Home Affairs.

Prof Shibli had resigned from the top post on August 10, five days after the fall of the Awami League government following a student-led uprising.

The interim government on August 18 appointed Khondoker Rashed Maqsood, a former banker, as BSEC chairman.

The interim government on Wednesday appointed Md Ali Akbar, a former senior district and sessions Judge, as a commissioner of the BSEC for a four-year term.

The Financial Institutions Division (FID) issued a notification in this regard on Wednesday, replacing four commissioners, including chairman, out of five.

One commissioner post still remains vacant.

Earlier in March 2020, the stock market regulator set the lowest price of all stocks by calculating the average prices from the preceding five days to stop the index from falling amid the pandemic.

The decision was criticised by most analysts and foreign investors. The BSEC then lifted floor prices in phases from April 2021.

At the end of July 2022, it once again restricted stock price movement to avoid negative impacts of global economic uncertainties caused by the Russia-Ukraine war.

Floor prices have again been removed in phases since January 18 this year.

On April 24, the BSEC reduced the lower limit of the circuit breaker to 3 per cent from 10 per cent for all listed securities, other than the six which had floor price until Wednesday.

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