The Bangladesh Securities and Exchange Commission (BSEC) has lifted the floor price mechanism for Beximco Ltd, Khulna Power Generation and Shahjibazar Power effective on Sunday, according to an order from the market regulator issued last Thursday.
And although BSEC Chairman Shibli Rubayat-Ul Islam has not attended office since Sheikh Hasina resigned from her post as prime minister on August 5, he signed the order at an undisclosed location.
The BSEC had introduced the floor price mechanism, which set the lowest trading price for each stock, in July 2022 to halt the freefall of market indices amid economic uncertainties brought on by the aftereffects of Covid-19 and Russia-Ukraine war.
Later, the market regulator lifted the floor prices of all but six companies whose investors were waiting to sell their shares as it feared that doing so could cause a sharp decline in the benchmark index of the Dhaka Stock Exchange (DSE).
But after seeing a huge rise in the key market index after the fall of the Awami League government, the BSEC withdrew the floor prices for three companies.
The remaining three companies -- BSRM Ltd, Islami Bank and Meghna Petroleum - will also have their floor prices removed from August 14, as per the BSEC order.
A former director of the DSE, said the BSEC chairman issued the order while remaining absent from work to prove that he is still in the country.
With this order, the BSEC Chairman is trying to stop the market's rise by allowing shares of Beximco, which did not see any buyers amid the recent gaining streak, to sell at lower prices, he added.
He elaborated that it will negatively impact the market if the shares of companies with large paid-up capital, such as Beximco, start falling as their price fluctuations heavily influence the main index.
"So, as the BSEC chairman wants to dent investor confidence by lowering the index, he lifted the floor price on this company even though its shares have no buyers," he said.
Moreover, the BSEC chairman is giving Beximco's owners the chance to sell their shares at a lower price even if they were bought under someone else's name.
Against this backdrop, Emon questioned how the BSEC could lift the company's floor price even though its chairman is absent, and no commission meetings are being held.
BSEC Chairman Islam did not respond to requests for a comment by the time this report was filed.
However, BSEC Spokesperson and Executive Director Mohammad Rezaul Karim told media that the floor prices were lifted following the same process used previously and it was not a decision of any commission meeting.
