Stocks can’t fall over 2pc

The Bangladesh Securities and Exchange Commission (BSEC) has lowered the circuit breaker limit to 2 per cent from 10 per cent in order to curb the free-fall of stocks amid the war between Russia and Ukraine.

Prof Shaikh Shamsuddin Ahmed, a commissioner of the BSEC, said the regulator decided to lower the limit for a short period as the market is being battered by external circumstances.

"The facility will not continue for a long time as it will be lifted after the market situation improves," he said while speaking with journalists at his office yesterday.

Although the stock market index returned to a positive trend yesterday, it plummeted by 297 points in the previous four trading days. This sent the index to its lowest position in more than seven months, according to data from the Dhaka Stock Exchange (DSE).

Apart from lowering the circuit breaker limit, the regulator ordered an investment of Tk 100 crore in the stock market from the stabilisation fund in order to ensure higher liquidity in the market.

"The investment has already started," Ahmed said.

In June last year, the BSEC passed a rule that formed the market stabilisation fund using undistributed and unclaimed dividends of listed companies. The aim is to use the funds to safeguard the interests of the stock market and general investors.

The BSEC commissioner went on to say that protecting investors is a key task of his organisation and so, they take many steps in this regard.

Lowering the limit and directing fund managers to pour in money from the stabilisation fund came in line with the same reason.

Some people spread rumours concerning the war and its impact on the stock market.

"But we traced these people and have decided to take action against them," he said.

General investors should not pay heed to rumours, and instead analyse the reality behind the rumours before taking any investment decision.

"We have proper acts on market makers even though there are no such entities in the country. If there were some market makers, they could help the market in such tough periods," Ahmed said.

"The Investment Corporation of Bangladesh also cannot play a proper role when the market falls, so the turnaround becomes slow," he added.

Mohammad Rezaul Karim, executive director and spokesperson of the BSEC, was present at the event.