The Bangladesh Securities and Exchange Commission recently lifted floor price restrictions on 320 listed companies after 18 months of the imposition of the system.
The stock market regulatory body, however, has kept 35 other listed companies under the floor price restrictions.
The floor price will remain for the shares of Anwar Galvanising, Baraka Power, British American Tobacco, Beximco Ltd, Bangladesh Submarine Cable Company, BSRM Ltd, BSRM Steels, Confidence Cement, DBH Finance, Doreen Power, Envoy Textile, Grameenphone, HR Textile, IDLC Finance, Index Agro, Islami Bank, KDS Accessories, Khulna Power, Kattali Textile, Malek Spinning, Meghna Petroleum, National Housing Finance, National Polymer, Orion Pharma, Padma Oil, Renata, Robi Axiata, Saiham Cotton, Shasha Denim, Sonali Paper, Sonar Bangla Insurance, Shinepukur Ceramics, Shahjibazar Power, Summit Power and United Power Generation Company.
The BSEC issued an order to this effect on Thursday, withdrawing the restrictions on the 320 companies.
On July 28, 2022, the BSEC imposed floor prices on all listed companies to prevent excessive falls in stock prices amid economic concerns in the country.
There are 355 companies and 37 mutual funds listed on the DSE.
Dhaka Stock Exchange data revealed that nearly all prominent companies, including multinationals, have been stuck at or near the floor price levels for more than a year, creating unfavourable conditions on the market.
According to the new order, the floor price would be applicable only to 35 companies.
However, the order did not clarify the criteria for selecting these 35 companies for continued restriction.
The regulator lifted floor price from all the other 379 securities and imposed regular upward and downward circuit breakers ranging from 3.5% to 10% based on their closing prices in the last trading day.
Generally, the higher the tick price, the narrower the circuit breaker.
The BSEC faced heavy criticisms from different corners for maintaining the floor price restriction for such a prolonged period.
Experts observed that this restriction caused about two-thirds of companies to be stuck at the floor price, hindering genuine price discovery and leaving investors in the dark about the real state of the market.
Many potential investors are hesitant to inject funds into the market due to the constraints imposed by the floor price, which would immobilize their investments and prevent them from selling when necessary, they further said.
Foreign investors also became frustrated due to the restriction, as it prevented them from selling or adjusting their portfolios, sources added.