A recent directive from the Bangladesh Securities and Exchange Commission (BSEC) aimed at redefining Z-category companies has confused investors, triggering a significant sell-off of shares. The broad definition of non-compliance outlined in the directive has led to fear and pressure among investors, resulting in a bearish trend in the market. Since March 3rd, the DSEX benchmark index of the Dhaka Stock Exchange (DSE) has fallen by 386 points, with over 50 listed companies currently non-compliant with listing rules or other BSEC regulations. While the DSE has downgraded 22 companies to the Z category for negative retained earnings and inactivity, the lack of clarity on non-compliance criteria has made investment decisions challenging. With uncertainty looming over the classification of companies, investors are apprehensive about the future trajectory of the stock market.
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