Bangladesh Securities and Exchange Commission (BSEC) has lowered the circuit breaker limit to 2.0 per cent from the existing 10 per cent due to the current downfall of the stock market.
The new circuit breaker will come into effect from Wednesday, report bdnews24.com and BSS citing a BSEC circular.
From now on, the price of shares of all companies listed on Bangladesh’s stock exchange may only fall up to 2 per cent.
“The Bangladesh Securities and Exchange Commission hereby directs, on a temporary basis, the Dhaka Stock Exchange Limited and the Chittagong Stock Exchange Limited to impose standard downward price change limit (circuit breaker) of 2 per cent – based on the previous trading day’s closing price,” BSEC said in a statement.
A decision was also made to invest Tk 1.0 billion into the stock market from the Capital Market Stabilisation Fund (CMSF) if the weakness of the stock market persisted and the investment began entering the market on Tuesday, the BSEC official Shamsuddin Ahmed said at a press conference on Tuesday.
“Instructions have been sent to limit share price drops to 2 per cent below the closing price on the previous day,” he said. “However, the limit on share price increases will remain the same.”
According to the previous circuit breaker rules, any shares below Tk 200 in price can increase or decrease in price by 10 per cent. Shares priced between Tk 200 to Tk 500 can fluctuate in price by 8.75 per cent, those priced from Tk 500 to Tk 1,000 by 7.5 per cent, those up to Tk 2,000 in price by 6.25 per cent, those up to Tk 5,000 in price by 5 per cent, and those priced above Tk 5,000 by 3.75 per cent.
Russia’s war with Ukraine has caused oil prices to skyrocket to levels unseen since 2008, causing anxiety on the Dhaka stock market.
Under this pressure, the benchmark index, DSEX, fell 182.12 points in a day, or by 2.74 per cent. This was the largest percentage fall in a day in 11 months. The share price of 96 per cent of companies traded fell on Monday.
A similar trend was taking place on Tuesday morning, triggering the decision regarding the circuit breaker and the investment.
