Regulator halts floor removal plan for next batch of scrips
Responding to the deteriorating condition of the stock market, the Bangladesh Securities and Exchange Commission (BSEC) is now planning to go slow with the removal of floor prices for the remaining scrips.
Instead, it is going to allow smaller trades in the block market where prices can go up to 10% lower than the floor price.
"Let the market get stronger so that further relaxation of floor prices does not hurt investors," BSEC Chairman Professor Shibli Rubayat Ul Islam told The Business Standard on Tuesday.
According to sources, the commission was planning to remove the floor for a new batch of listed scrips and impose a tight lower price limit by early January. Just like it did for the 168 small-cap scrips that got their floors removed on 22 December while their prices cannot fall by more than 1% a day.
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Observing some year-end purchase pressure that helped stocks gain for two consecutive sessions at the end of December, the regulator was planning to continue the floor relaxation in a similar fashion.
But, the market again slowed down in the new year and daily turnover in the Dhaka Stock Exchange (DSE) shrunk below Tk147 crore on Monday as more scrips lost spontaneous bidders.
On Monday, 335 of the 400 DSE scrips had no bidders, up from 305 in the last session of 2022.
But on Tuesday, stocks got some more buyers and the number of scrips without bidders slightly declined to 330 during the closing bell.
DSEX, the broad-based index of the DSE, closed 0.12% higher at 6,185 on Tuesday and increased participation helped turnover to recover to nearly Tk200 crore from Tk147 crore in the previous session.
But the turnover was still far from being enough to offer liquidity—the ease of selling.
Shibli Rubayat Ul-Islam said BSEC is planning to allow smaller trades in the block market to help retail investors sell shares if they need cash or want to rebalance their portfolios.
The commission meeting to decide the new minimum value for block market trades will be held on Wednesday.
Block trading takes place beyond the regular trading screen and the BSEC, following the imposition of floor prices at the end of July, lowered the floor for block trades by 10% in mid-November last year.
