Dhaka, Bangladesh (BBN)-Bangladesh's securities regulator on Tuesday put a restriction on margin loan facilities for first 30 trading days of newly listed companies to contain unusual price hike, officials said.
The regulator also barred to avail margin loan facilities for first 30 trading days of changing category of the listed companies.
The decision came at a commission meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC).
The securities regulator took the decision in an effort to contain abnormal price hike observed for first few trading days of newly listed companies.
According to Dhaka Stock Exchange (DSE), the latest share price of Olympic Accessories witnessed a rise of 391 per cent on the day of debut trading.
Among other companies, the market prices of Aman Feed and KDS Accessories rose 173 per cent and 329 per cent respectively on the day of debut trading.
A BSEC official said the regulator has observed extreme volatility from the first trading day of the newly listed companies.
“Price hikes are created because of margin loan facilities provided by the lenders of the capital market. But those prices do not sustain and started to fall after one month,” he said.
He said the regulator has put restriction on margin loan facilities to contain the volatility of the prices of newly listed companies.
“The regulatory has re-activated previous directive regarding restriction on margin loan facilities for the sake of sustainability in the market prices of newly listed companies,” he added.
BBN/ASI/AD