BSEC cancels stock exchange pre-opening session

The Bangladesh Securities and Exchange Commission (BSEC) has postponed the 15-minute pre-opening session for Dhaka and Chittagong Stock Exchanges.

The move came after the misuse of the opportunity, the regulatory body said in a directive issued on May 19.

According to the directive, the pre-opening session of the stock market will be temporarily postponed from Sunday until further notice. However, the post-closing session will continue.

Earlier, both the stock exchanges were given an opportunity to set orders to buy or sell shares of the companies 15 minutes before the commencement of trading.

The sessions are called “Opening Auction Call” on the Dhaka Stock Exchange and “Opening Price Publication” on the Chittagong Stock Exchange.

In October 2020, BSEC approved pre-opening and post-closing sessions on both the stock exchanges.

The pre-opening session on both the stock exchanges starts at 9:45am and the opening session starts at 10:00am.

Investors can only set buy or sell orders during the pre-opening session.

An ideal opening price is determined in this session. The opening price is the price at which the highest number of buyers and sellers stay. The transaction is completed at this opening price at regular trade.

Many suspect that this pre-opening session has something to do with the recent downturn in the country’s capital market

Some would place some orders before the start of the transaction, which would confuse the general investors and spread panic.

This would lower the index at the beginning of the transaction. Later, the market can no longer get out of this trend.

Therefore, BSEC decided to postpone the pre-opening session to stop this malpractice.