The Securities and Exchange Commission on Monday halved the limit of circuit breaker on individual stock in a bid to tighten the price fluctuation of shares of the company.
‘The new circuit breaker will come into effect on Tuesday (today),’ said an SEC official.
If a company’s share price is Tk 200, then its share price will not be allowed to increase or decrease by 10 per cent or by Tk 17.50 on the day. Earlier, the circuit breaker was 20 per cent or at Tk 35. Listed companies are put under different circuit breaker limit according to their share price. If the share price of company is between Tk 201 and Tk 500, then the price of share will not allowed to increase or decrease by 8.25 per cent. Earlier, it was 17.5 per cent.
Share price of a company will not be allowed to increase or decrease by 7.5 per cent, if its share price is between Tk 501 and Tk 1,000. Earlier it was 15 per cent.
If the share price of a company is between Tk 1,000 and Tk 2,000, then the price of share will not allowed to increase or decrease by 6.25 per cent. Earlier it was 12.5 per cent.
If the share price of an issue is between Tk 2,000 and Tk 5,000, then the price of share will not be allowed to increase or decrease by 5 per cent. Earlier it was 10 per cent.
If the share price of an issue is from Tk 5,001 to highest limit, then the price of share will not be allowed to increase or decrease by 3.75 per cent, or by not more than Tk 300 on the day. Earlier it was 10 per cent and not more than Tk 600.
The finance minister, AMA Muhith, after a series meeting with top government officials and stakeholders, on Sunday decided to withdraw circuit beaker on the general index and asked the stock market regulators to reduce circuit breaker limit on individual companies to bring back normalcy in the volatile stock market.
