Published :
The newly formed commission of the Bangladesh Securities and Exchange Commission (BSEC) on Monday lifted the floor prices on shares of Beximco and Islami Bank, bringing an end to the floor price regime after four years. Both stocks hit their lower circuit breaker in the first trading session following the removal of the price restriction.
Beximco’s share price plunged nearly 10 per cent to Tk 99.10, while Islami Bank fell 9.82 per cent to Tk 29.40, as investors sought to exit holdings that had remained trapped under the floor price mechanism for an extended period.
Despite the sharp declines in Beximco and Islami Bank stocks, the impact on the benchmark index remained limited.
“Beximco had already been excluded from the DSEX index during the latest rebalancing, meaning movements in its share price no longer affect the benchmark index,” said Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage.
Beximco was dropped from the DSEX composition in the latest annual rebalancing after failing to meet the index’s eligibility criteria, including the minimum average daily turnover requirement.
On the other hand, around 88 per cent of Islami Bank’s shares remain locked in the hands of sponsors and strategic investors, leaving only a small free-float portion available for trading and limiting the scope for significant market disruption, he said.
Islami Bank’s market capitalisation is Tk 52.5 billion while its free-float market capitalisation is only Tk 6 billion as of Tuesday, DSE data showed.
Although Islami Bank alone dragged the DSEX down by nearly 20 points, gains in Square Pharmaceuticals, NCC Bank, IDLC Finance, City Bank, Robi Axiata and Grameenphone offset the decline.
The market appears to have absorbed the removal of the floor price smoothly, and the absence of any major shock is a positive sign for market stability, said Mr Shawon.
Market analysts said the broader market’s resilience indicates that investors view the move as a positive step towards restoring normal price discovery and improving market efficiency by allowing the two stocks to trade freely based on actual demand and supply.
The market maintained positive momentum throughout the session, supported by broad-based gains across sectors. Continued accumulation of insurance stocks reflected investors’ preference for momentum-driven opportunities and expectations of short-term gains.
The benchmark DSEX index of the Dhaka Stock Exchange rose 36.31 points, or 0.66 per cent, to 5,519, recovering after losing 33 points in the previous session.
“Anticipation of favourable fiscal measures in the upcoming national budget and expectations of policies aimed at revitalising private-sector growth reinforced investor confidence and sustained demand for attractively valued stocks,” said EBL Securities in its daily market commentary.
According to the brokerage firm, resilient investor sentiment also outweighed any adverse impact stemming from the withdrawal of floor prices on the remaining two heavyweight stocks.
Market liquidity remained strong, with turnover on the prime bourse reaching Tk 13.88 billion, marking a 30 per cent increase from the previous session.
The Chittagong Stock Exchange also closed marginally higher, with its All Share Price Index (CASPI) gaining 3 points to 15,317, while the Selective Categories Index (CSCX) advanced 0.83 points to 9,410.
Source : https://thefinancialexpress.com.bd/stock/bangladesh/switch-to-targeted-fuel-subsidies-could-save-billions-protect-the-vulnerable
