Stock floor price will be lifted once economy stabilises: BSEC

The stock market regulator will withdraw the market's floor price as soon as the economy reaches a stable condition and investments of investors are secured, said a top official of the Bangladesh Securities and Exchange Commission (BSEC) today.

"We are also eagerly waiting for a suitable time to lift the provision of the floor price," said BSEC Chairman Shibli Rubayet Ul Islam at a seminar in Dhaka.

The floor price is the lowest price at which a share can be sold.

The BSEC set the floor price of every stock at the end of July last year to halt the free fall of the market indices amid global economic uncertainties.

The floor price was determined based on the average of the closing prices on July 28 of the year and the preceding four days.

The economy is moving towards eventually reaching a stable condition after facing a lot of challenges like the fallouts of the pandemic, a dollar shortage and the Russia-Ukraine war, said Islam.

So, once it is understandable that the capital of investors no longer needs to be protected and that no crash of the stock market will recur, the BSEC will lift the floor price, he said.

The BSEC chairman also called on investors to invest in treasury bills and treasury bonds, explaining that those were very secure while returns were also good.

Many do not know that individual investors can also buy treasury bills and treasury bonds, he said, adding that the size of the bonds market had already crossed 3 lakh crore and this investment was guaranteed.

Currently the BSEC is working with the finance ministry to enable the listing of 22 state-owned companies soon, he said.

The seminar was on "Economic challenges for Bangladesh Capital Market: Possible Remedies" organised by Economic Reporters' Forum (ERF) on its premises.

It is possible for institutional and retail investors to separately conduct trade on the stock markets for better performance, said Hafiz Muhammad Hasan Babu, chairman of Dhaka Stock Exchange (DSE).

A new programme will be launched under the Capital Market Stabilisation Fund (CMSF) called "Investors Stabilisation Fund" (INSAF) so that more facilities can be provide to investors, said Md Nojibur Rahman, chairman of the CMSF.

The small and medium enterprise board has been formed in the capital market so that small investors can avail money for investments, said Asif Ibrahim, chairman of Chittagong Stock Exchange.

Expatriates should be encouraged to make long-term bond purchases, said SM Parvez Tamal, chairman of NRB Commercial Bank Limited.

Banks are enablers of short-term investments while bonds long-term ones. But in Bangladesh, banks are used for long-term investments, he said.

The slowdown in the stock markets may continue for the next six months but their revival may begin afterwards, said Hasan Imam, president of the Association of Asset Management Companies and Mutual Fund.

Mohammad Mufazzal, a member of the ERF and a staff reporter of The Financial Express presented a keynote paper. ERF President Mohammad Refayet Ullah Mirdha also spoke.