Regular circuit breaker made applicable from day 1
Securities regulator puts further brake on volatility in newly listed stocks at the bourses.
Usual circuit breaker will be applicable from day 1 for the newly listed securities, instead of day 3, ordered the Bangladesh Securities and Exchange Commission (BSEC) on Thursday.
The order will have immediate effect and will remain in force until further notice.
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Circuit breaker is the limit stock exchanges put on scrips' price change for specific day.
At the bourse of Dhaka and Chattogram stocks with a higher price face a tighter circuit-breaker, while the cheapest stocks can go up or down by up to 10% in a day.
Observing some unusual overpricing cases in new stocks, the regulator in late 2019 had put a 50% circuit breaker for day 1 and day 2 after debut, while the scrips are subject to regular circuit breaker from day 3.
The 2019 brake, applicable until Thursday, used to mean, a price of a new stock cannot go above or below the 50% range of issue price—at which primary shares were issued—on the debut day.
However, the new order capped the debut day price volatility range within 10%.
