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Romania's stock market to hike variation limit to 40% for its most liquid stocks

The Bucharest Stock Exchange (BSE) will increase the maximum variation limit from 15 percent to plus or minus 40 percent for a group of very liquid stocks, which account for over 90 percent of the market, declared for NewsIn Stere Farmache, head of the BSE.

The BSE shareholders agreed in December last year to modify the variation limit after concluding the 15 percent value is rather stiff.

"We have taken this decision to observe some effects and for this we needed the companies to have a certain liquidity," said Farmache.

According to a draft completed last year by the BSE management, the shift from the 15 percent variation limit to the 40 percent limit will not be sudden, but rather gradual, so as not to surprise investors and to give them time to react and think it over.

Thus, the price of a share will initially have a 15 percent variation limit, which will be then extended gradually to 25 percent, 35 percent and 40 percent respectively.

The price of a share cannot rise or fall more than 15 percent over the reference level in a single day, according to the present code of the stock market.

 

Sursa: http://www.newsin.ro

Tags: percent limit variation market stock

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