BSEC raises circuit breaker’s lower limit

The Bangladesh Securities and Exchange Commission (BSEC) has raised the market circuit breaker's lower limit to 5 per cent from existing 2 per cent with effect from today.

Last month the regulator lowered the circuit breaker's lower limit to 2 per cent from 10 per cent in an attempt to stop any free fall of the stock market index amid the global chaos following the start of the Russia-Ukraine war.

However, the lowering of the circuit breaker turned the market illiquid and turnover of the Dhaka Stock Exchange (DSE) dropped to its lowest in a year in the current week.

Responding to this, the BSEC increased the lower limit. As a result, the stocks will be allowed to fall by at most 5 per cent in a day instead of 2 per cent.

The BSEC issued an order in this regard yesterday, saying this was expedient in regulating share price movements in trading at the stock exchanges and was in the interest of the investors and development of the securities market.

The BSEC hereby directs, on a temporary basis, that the DSE and Chittagong Stock Exchange impose standard downward price change limit (circuit breaker) of 5 per cent instead of 2 per cent based on the previous trading day's closing price, it said.

The upper limit of the circuit breaker shall remain unchanged, it added.