Bangladesh Securities and Exchange Commission (BSEC) has directed authorities concerned to invest Tk 100 crore in the capital market to save the market from a big fall amid the Rusian-Ukrain war crisis.
The directive was made effective yesterday while the Tk 100 crore fund was requested from the Capital Market Stabilization Fund (CMSF).
Besides, the securities regulator has cut the lower circuit breaker at 2 percent due to the current downfall of the stock market. This circuit breaker will be effective from today (Wednesday).
According to the new decision, from now on, the share price of a company can be reduced by a maximum of 2 percent, which was 10 percent so far. However, the maximum limit for a share price increase has been kept at 10 percent as before.
BSEC Commissioner Professor Sheikh Shamsuddin Ahmed made the remarks while briefing the reporters at an emergency press conference at the BSEC office on Tuesday.
However, the capital market collapsed on February 24 amid Russia-Ukraine war crisis.
In eight working days till Monday, the prime index of the Dhaka Stock Exchange (DSE) fell 382 points or 5.59 percent.
The index fell another 137 points in less than an hour of trading on Tuesday. Then there was panic among the investors.
Meanwhile, the stock market index returned to the positive territory on Tuesday after losing 297 points in the previous four consecutive days when the index also hit its seven-month low.
At an emergency press conference, explaining the reason for this decision, Ahmed said, “This decision has been taken in the current situation. It will not be as long as before. If the situation improves, the 2 percent limit will be lifted.”
Earlier, the BSEC had fixed the floor price by fixing the minimum price of each company's share on March 19, 2020 of that year when the country's stock market crashed in 2020 due to the outbreak of the epidemic coronavirus.
However, due to good market conditions, in June last year, the regulatory body lifted the floor price of all companies. In addition, circuit breakers (maximum and minimum limits of price increase or decrease) are set in six categories.
In a press conference, BSEC Commissioner Professor Sheikh Shamsuddin Ahmed said, “Protecting investors is our basic and main task. That is why we make various efforts. Following this, it has been decided to limit the bidding limit to 2 percent and to invest Tk 100 crore in the stabilization fund.”
