The Bangladesh Securities and Exchange Commission (BSEC) has taken steps to curb the abnormal rise in the price of shares of new listed companies. For this purpose, there will be no special circuit breaker in the share trading of the new company from the listing day but the same 10% circuit breaker application as other companies from the first day of the transaction.
On Thursday (May 6, 2021), the BSEC has issued a directive on this regard.
As per the previous rules, the limit of circuit breaker for the first two days was 50% in the shares trading for the newly listed company. In other words, the price at which a company would sell shares could increase by up to 50% on the first day of trading from the rate it was sold from IPO. On the other hand, the price could have increased by another 50% on the closing price on the first day. Then, the normal 10% circuit breakers were to be applicable from the third day. Suppose a company’s shares are sold in an IPO at a price of Tk. 20. According to the previous rules, the share price could have gone up by Tk.20 on the first day of trading to Tk.30. On the second day, the price could have been increased by another 50% , from Tk. 15 to Tk.45.
According to the new guidelines, the share price of the newly listed company will be able to rise by up to 10% like other companies. BSEC Executive Director and Spokesperson Mohammad Rezaul Karim said In this regard that, the commission has taken a new decision to stop this trend and protect the interests of investors.