The Dhaka Stock Exchange (DSE) has urged the Bangladesh Securities and Exchange Commission (BSEC) to maintain stable policies, citing that frequent policy changes could disrupt the stock market and discourage investors.
In response to the securities regulator's new directive imposing a 3% daily price decline limit on stocks, the DSE Board of Directors convened a meeting with BSEC Chairman Professor Shibli Rubayat-Ul-Islam at the commission's office today.
To address the recent stock market slump following Eid, the BSEC stepped in on Wednesday, implementing a new rule for both Dhaka and Chittagong bourses, limiting daily stock price declines to 3% starting Thursday. This is a significant reduction from the previous 10% limit.
Despite BSEC's policy change in price cap to stop the free fall of stock prices, the DSE's benchmark index, DSEX, plummeted by 60 points on Thursday, accompanied by a decline in the share prices of 76% companies.
DSE board members present in the meeting told TBS that they expressed concern that the BSEC's frequent policy changes are hindering market stability, shaking investor confidence and making them anxious. The commission implemented this new rule reportedly without prior consultation with the bourses.
Sources said that the DSE has additionally called for the issuance of IPOs by reputable companies to instil stability in the market. Furthermore, the DSE has proposed an amendment to a clause in one of the commission's directives concerning the transfer of listed companies to the Z category.
During the meeting, the DSE expressed concerns that the directive has significantly pressured the capital market, leading to investor panic. Urgent rectification of the situation was emphasised.
The commission has acknowledged the statements made by the DSE, affirming that these issues would be promptly addressed.
The commission's directive issued on 15 January concerning the transfer of listed companies to the Z category stipulates that any listed company may be reclassified to Z upon approval from the commission for non-compliance with any provision of securities laws, rules, regulations, notifications, orders, directives, or failure to meet continuous listing requirements.
However, in accordance with the directive, approximately 90 companies qualify for downgrading to the Z category. Hence, the DSE has requested the commission to amend the notification.
Source: The Business Standard