Stocks of 66 listed companies, for whom the floor price was recently lifted, will be allowed to fall a maximum of 2 per cent a day instead of the usual 10 per cent.
The market has a circuit breaker or trading curb which limits abnormal price fluctuations to 10 per cent in both directions for all stocks.
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However, the latest decision of the stock market regulator has kept unchanged the upper limit, meaning a 10 per cent rise will be allowed a day.
The floor price, which is essentially a limit on how low prices can go, was set for all stocks on March 19, 2020 by the Bangladesh Securities and Exchange Commission (BSEC).
It was aimed at stopping the index from falling amid the pandemic-induced rout.
But the decision was criticized as it impacted normal trade.
The next day, the DSEX, the benchmark index of the DSEX, dropped around 25 to 27 points solely for the free fall of the 66.
The whole market’s impact that day was an 82-point plunge of the index.
Thanks to the new circuit breaker, the impact will be at most 5 points, even if all the companies fall, said BSEC Spokesperson Mohammad Rezaul Karim.
The order has already been issued and will take immediate effect from today (Sunday), he said.
“We have taken the decision as per investors and stakeholders’ demand,” he said.
The main reason behind taking the decision is to save investors, he said, adding that investors were in panic, so some shares might be downed to a high extent within the next three to four days.
When general investors sell off the shares, a vested group buys those, taking advantage of the low price. “We don’t want to give them that opportunity,” he added.
The BSEC also informed that the stock market would remain open in upcoming strict lockdowns if banks were kept open.
