Beximco, Islami Bank freed of price limit, ending long liquidity concerns

The stock market regulator on Monday finally lifted the floor prices on shares of Beximco and Islami Bank Bangladesh, bringing an end to nearly four years of trading restrictions on the two companies.
According to an order issued by the Bangladesh Securities and Exchange Commission (BSEC), the decision takes effect from Tuesday. However, the regular circuit breaker will apply to both stocks, allowing share prices to rise or fall by up to 10 per cent in a single trading session.
"The removal of the restriction on the last two stocks effectively eliminates the final obstacle that has kept Bangladesh off the global index agenda for years," said Md Moniruzzaman, managing director and CEO of Prime Bank Securities.
The world's largest index providers, MSCI and FTSE Russell, had long flagged concerns over market accessibility, liquidity, and regulatory intervention in Bangladesh - suspending index reviews primarily because of the floor price restriction on Beximco and Islami Bank.
The move came after newly appointed BSEC Chairman Masud Khan reiterated his opposition to the floor-price mechanism, saying the artificial measure to prevent share price declines would not return under any circumstances.
Analysts, asset managers and merchant bankers welcomed the decision, saying it would restore normal price discovery and improve market efficiency by allowing the two stocks to trade freely based on actual demand and supply.
The floor price removal is expected to boost trading activity, said Mir Ariful Islam, managing director and CEO of Sandhani Asset Management. Islami Bank and Beximco have large investor bases, and many shareholders have been unable to trade freely for a prolonged period due to the price restriction, he explained.
Market participants warned of an immediate negative impact on the stocks. Having remained frozen for years, both counters may face significant selling pressure as investors seek to exit positions after being trapped for a long time.
Despite the short-term risks, Mr Islam said he believed the long-term benefits outweigh the concerns.
"The removal is necessary for restoring normal market operations and strengthening investor confidence over the longer term," he said, adding that the recent upbeat market sentiment, rising turnover and expectations of regulatory reforms could help absorb some of the selling pressure.
Echoing the view, Akramul Alam, head of research at Royal Capital, said a capital market is fundamentally a place for price discovery, where floor prices should never exist.
"The removal enhances market credibility and reinforces investor confidence in the reform initiatives undertaken by the securities regulator," he said.
The floor price removal had been a long-standing demand of market participants, including stockbrokers and foreign investors, and the newly appointed commission has finally acted on it, said Mr Alam.
"The decision sends a strong signal that the new commission is committed to reducing market distortions and restoring investor confidence."
The removal marks the end of a temporary regulatory measure first imposed on all listed securities in March 2020 to stop the free fall of stocks amid the onslaught of Covid-19.
The regulator subsequently removed the restriction in phases as the pandemic subsided, but reintroduced it in July 2022 to halt a market downturn amid global economic uncertainty stemming from the Russia-Ukraine war.
While designed to prevent free falls, the price restriction ultimately locked many stocks at their lowest regulated levels, severely squeezing market liquidity and hindering normal price discovery.
The regulatory interference drew sharp criticism from most market analysts and foreign investors. It was withdrawn in phases, with the final round completed in August 2024, leaving only Beximco and Islami Bank under the restriction.
Islami Bank's stock performance
Shares of Islami Bank have experienced dramatic swings over the past two years amid shifting investor sentiment driven by political and corporate developments.
After remaining stuck at its floor price for more than two years, the stock surged to a decade-high of Tk 70.4 in September 2024, about a month after the fall of the Hasina-led government in August 2024.
Investors had speculated that the political transition could pave the way for governance reforms, greater transparency and a stronger financial position for the bank.
However, that optimism gradually fizzled out. The stock has since declined sharply and has remained stuck at the floor price of Tk 32.6 per share since May 7 this year.
Market participants attribute the decline to uncertainty surrounding the bank's board and management, as well as speculation that the controversial S Alam Group may attempt to regain influence over the lender.
The bank has also faced pressure from rising non-performing loans and large provisioning requirements, although it reported a profit in 2025 after availing itself of special facilities provided by the central bank.
Beximco's stock performance
Shares of Beximco have remained stagnant at the inflated floor price of Tk 110.10 per share, with buyers virtually absent from the counter.
The company reported a loss of Tk 359 million in FY24, while its half-year loss widened to Tk 3.56 billion in July-December of FY25. It has since not published any financial reports, as the company has been facing operational challenges following the arrest of Salman F Rahman, vice-chairman of Beximco Group, in August 2024.
There are widespread allegations that Mr Rahman abused political power to raise large sums from the capital market by issuing bonds in breach of securities rules.

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