BSEC exempts 30 more companies from floor price barrier
They can trade their shares without the restriction from 6 June
The capital market regulator has allowed another 30 companies to trade their shares without the barriers of the floor price system from 6 June to protect the interest of investors as they could not buy or sell these shares.
Bangladesh Securities and Exchange Commission (BSEC) made the decision at a meeting on Thursday and wrote to the Dhaka Stock Exchange and Chittagong Stock Exchange, asking them to take appropriate measures in this regard.
The 30 companies include Renwick Jajneswar, Monno Agro and General Machinery, Bata Shoe, Kohinoor Chemicals, Northern Jute, Standard Ceramic, Wata Chemical, Sonali Paper, Apex Footwear, Kay and Que, Bangladesh Autocars, Stylecraft, Gemini Sea Food, Eastern Cables, Apex Spinning, Monno Ceramic, Bangas, CVO Petrochemical, Atlas Bangladesh, Apex Tannery, Samata Leather, National Tubes, Aziz Pipes, Sea Pearl Beach Resort, Hakkani Pulp, Orion Infusion, Legacy Footwear, SK Trims, National Polymer, and Daffodil Computers.
The securities regulator also directed the stock exchanges to impose the 2% standard downward price change limit, widely known as the circuit breaker, on the reference price, which is determined by previous trading day's closing prices.
On 7 April, BSEC allowed 66 companies to trade their shares without the floor price system.
Sources at the regulator said about 44 companies' share prices remain stuck at the floor price or the lowest price level for a long time. That is why these shares have not been traded for a long time, leading the commission to exempt them from the floor price barrier.
On 19 March last year, BSEC imposed the floor price to curb abnormal price falls due to the coronavirus pandemic.
As per its directive at the time, the opening price of the listed securities would be the average of the closing price of the immediately preceding five trading days from 19 March, and this average price calculated for each security was considered the floor price and the lowest limit of the circuit breaker.
Initially, most of the stocks were not getting buyers. But the floor price turned into an almost forgotten issue since mid-2020 as the market strongly bounced back riding on a strong macro economy, low interest rate, and increased confidence in the market regulator.