The regulatory body Bangladesh Securities and Exchange Commission (BSEC) has taken new initiatives to prevent the continuous fall in share prices. This time, BSEC has introduced new rules of circuit breaker (maximum limit of increase or decrease in price) in case of reduction in the price of shares and units of listed companies.
As a result, no company’s share price can fall more than 3 percent in a day. However, this limit will not apply to companies on floor price. According to BSEC, this action has been taken in the interest of investors.
BSEC has issued an instruction in this regard on Wednesday (April 24). BSEC Chairman Professor Shibli Rubaiyat-ul-Islam has signed it. The new rules for circuit breakers will come into effect from tomorrow Thursday (April 25).
The previous limit on share price appreciation remains in place. In light of the previous day’s market price of the shares, the next day price can increase from a minimum of 3.75 percent to a maximum of 10 percent.
In the existing circuit breaker system, price limits are fixed based on the share price. This limit is applied on the next day in light of the previous day’s closing price of the shares of any company.
If the share price of a company is within Tk 200, the share price may increase or decrease by up to 10 percent the next day. 8.75 percent from Tk 200 to Tk 500, 7.50 percent from Tk 500 to Tk 1000, 6.25 percent from Tk 1000 to Tk 2000, 5 percent from Tk 2000 to Tk 5000 and If it is more than 5000 rupees, 3.75 percent may increase or decrease.
The upper limit of this circuit breaker, the upper limit of the price increase, has been fixed today, the lower limit of the price decrease.
274 or 70 percent of the 394 companies traded in the Dhaka market today fell in price. 79 or 20 percent shares rose in price. And the price was unchanged at 41 or 10 percent.
While the share prices of most of the indices and traded companies fell, the total turnover showed a slight improvement. The volume of transactions on DSE on this day was Tk 603 crore, which is Tk 5 crore more than the previous day.
