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Bangladesh scraps last remaining stock market floor prices

Beximco and Islami Bank were the last shares subject to trading floors introduced during successive periods of market stress

With the withdrawal, normal circuit breaker rules will apply, set under a BSEC order from June 17, 2021.

Bangladesh’s securities regulator has withdrawn floor prices on Bangladesh Export Import Company Limited (Beximco) and Islami Bank Bangladesh PLC, ending more than three years of administered price floors across the country’s stock market.

The Bangladesh Securities and Exchange Commission (BSEC) issued the order on Monday, signed by chairman Masud Khan, lifting the restrictions last imposed on the two companies in August 2024. With the withdrawal, normal circuit breaker rules will apply, set under a BSEC order from June 17, 2021.

Under those rules, daily price movement limits range from 10 percent for shares priced up to BDT 200, falling in steps to 3.75 percent for shares above BDT 5,000. The slab-based circuit breakers also cover newly listed securities.

The Dhaka Stock Exchange Brokers Association of Bangladesh (DBA) had recently urged the commission to lift the floor prices, arguing that Beximco had been effectively untradeable for an extended period. It said the floor on Islami Bank and other shares since May 3 had blocked normal selling activity. Prolonged trading restrictions were raising the risk of negative equity for margin borrowers, threatening overall market stability, the DBA said in a letter to the commission.

After taking office, Khan told a press briefing that the commission would not impose floor prices again. The order followed days later.

Bangladesh’s stock market first entered the floor price era in March 2020, when BSEC imposed the mechanism to stem heavy selling triggered by the COVID-19 pandemic. The restriction was lifted in June 2021, only to be reinstated in July 2022 as economic instability deepened following Russia’s invasion of Ukraine. The commission removed the floor for 169 companies that December, but reimposed it in March 2023 after share prices fell sharply.

The floor was largely dismantled in January 2024, leaving 35 companies covered. Successive waves of withdrawals followed, with the final four companies released in August 2024 under the interim government. Until Monday, Islami Bank and Beximco remained the sole exceptions.

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