Don't miss




African nations need to prepare for potential return of thousands of jihadists

Read more


DR Congo former child soldiers awarded $10 mn in damages in landmark ruling

Read more


Website roots out "Rotten Apples"

Read more


Putin's press conference, Alabama election, One Planet Summit, Brexit Phase II, Disney & Fox

Read more

#TECH 24

WorldRemit: Helping migrant workers send money back home

Read more


The challenges awaiting the new leader of South Africa's ANC

Read more


Bangladeshi PM calls violence in Myanmar 'unacceptable'

Read more


Was 2017 the worst year for the environment?

Read more


Rhiannon Giddens strikes out on her 'Freedom Highway'

Read more


Clashes sparked by stock market dive in Bangladesh

Text by News Wires

Latest update : 2011-01-10

Bangladesh suspended trading on the Dhaka Stock Exchange Monday when stocks fell a record 9.25 percent causing security officials to use batons and tear gas to disperse angry investors upset over the market plunge.

AFP- Police fired tear gas and baton-charged thousands of investors in the Bangladeshi capital Dhaka on Monday as crowds vented their fury after the stock market tumbled nine percent in an hour.
Trading on the Dhaka Stock Exchange was halted when stocks fell a record 9.25 percent soon after opening in a plunge that sent outraged investors onto the streets.
The benchmark Dhaka Stock Exchange general index (DGEN) rose 80 percent in 2010 but has suffered a series of falls in the past three weeks, in what many analysts described as a much-needed correction.
Police clashed with protesters outside the stock exchange building, where tyres and office furniture were set alight as crowds chanted slogans against the government and market regulators.
Similar protests broke out elsewhere in the country with at least 500 investors rallying in the southwestern port city of Chittagong, local police chief Rafiqual Islam, told AFP.
In Dhaka, riot police reinforcements were called in by the bus-load to break up demonstrations as offices barricaded their gates and windows to avoid being attacked.
"There are up to 5,000 investors holding protests on the streets in front of the exchange building. Some of them have been violent," police inspector Azizul Haq told AFP.
"They have started vandalising government property, which forced us to use batons against them."
Television channels showed badly-bleeding protesters trying to escape after police wielding sticks beat back the crowds.
"I lost five million taka ($70,000) out of a 10 million taka investment. This is insane -- my whole savings are gone," investor Monirul Islam told AFP at the scene.
Since December 5, when the DGEN hit a record high of 8,918.51, it has lost 27.4 percent.
"The exchange has halted trading as per orders from the Securities and Exchange Commission after the benchmark index plunged 660 points, or 9.25 percent, in the first 54 minutes of trading," spokesman Shafiqual Islam said.
The fall was the largest single-day loss in the bourse's 55-year history.
"I poured all my money into the Dhaka stock exchange," said investor Humayum Kabir, who had lost 60 percent of his family's 2.5 million taka in savings.
"The finance minister lured us into the stock market, he told us it was safe, but now we have lost everything. They artificially jacked up the prices of junk shares and now our savings have vanished."
The DSE's market capitalisation hit a record 50 billion dollars in early December, but has since shed over 10 billion dollars as regulators moved to cool the over-heated bourse.
The DSE is tiny compared to other regional or global markets -- the Bombay Stock Exchange has a market cap of around 1.3 trillion dollars -- but the impact of a major crash may have dramatic consequences for Bangladesh.
The number of investors has nearly doubled in the last 15 months to some 3.3 million people.
On December 15, the Bangladesh Bank raised the cash reserve requirement (CRR) by 50 basis points, tightening money supply in a bid to rein in soaring inflation.
Analysts and protesters say this is what triggered the current collapse as some banks, which had invested heavily in the market, tried to offload their shares quickly in an attempt to meet the new capital requirements.
"We always knew any fall would be nasty -- now things are getting nasty," Reaz Islam, head of New York-based LR Global fund said.
"The market was unsustainably high. This was all expected. Panic selling by retail investors led to the crash."
"More than 70 percent of investors are small investors. Most invest without looking at the fundamentals of the market and these people are very emotional -- they are very hurt by this," he said.
Impoverished Bangladesh has enjoyed an average six percent annual economic growth rate over the last eight years.
The stock exchange has yet to announce when trading will resume.


Date created : 2011-01-10