Bangladesh Securities and Exchange Commission (BSEC), the capital market regulator, issued an order on Wednesday to prevent the continued slide in the stock market, imposing a limit beyond which prices cannot fall, or floor price for stocks.
According to the BSEC order, the price of shares and mutual funds of any listed company cannot fall by more than 3 percent in a day. Currently, company shares and mutual funds may fall by up to 10 percent depending on the price bracket they are in.
This decision has been taken to protect the interests of the country`s capital market and investors. The two stock exchanges of the country (DSE and CSE) have been instructed to implement this new decision from tomorrow (Thursday), said the BSEC.
Earlier in 2021, the capital market regulator BSEC had imposed the minimum price level or floor price of the share price to prevent the continuous decline in price of shares.
There was no scope for the share price of listed companies to fall below a certain limit. The imposition of floor price leads to a kind of stagnation in the market, according to experts, as selling of shares gets stuck at a price.
