flash crash bangledesh 27% drop this month, same day flash crash as pgn

Posted: January 10, 2011 in Uncategorized

Investors again riot in Bangladesh over stock market plunge

  • Rate this Story
  • 0
  • 0

By Staff Reporter | January 10, 2011 9:35 AM EST

In a repeat of a similar scenario from last month, thousands of Bangladeshi investors rioted on the streets of Dhaka, angry after incurring huge losses on the stock market.

The Dhaka Stock Exchange was halted after falling by 9.25 percent in less than an hour – the largest one-day decline in its history. That followed a 6.7 percent drop in Sunday trading.

Reuters
Investors beat the driver of a car during a clash around the Dhaka Stock Exchange in Dhaka

Subscribe to The Economic Monitor

Subscribe to The Economic Monitor to get the day’s most relevant news, data and anlaysis .
Sample

While the Dhaka benchmark index surged about 80 percent in calendar 2010, it has plunged 27 percent since early December.

The Bangladesh government regulator, the Securities and Exchange Commission, met on Monday with bankers and institutional stockbrokers to discuss how to prevent the market from incurring additional sharp losses.

Protests have also spread to the coastal city of Chittagong which has its own stock exchange.

Rumors have abounded that large institutional investors have abandoned the market after recording big gains, prompting other investors to exit equities. The pull-out was also precipitated by regulators’ decision to limit the percentage of deposits that banks may invest in the equity markets.

However, on Sunday morning regulators raised the bank loan ceiling of 100 million taka (about $1.43 million) for investing in the stock market and removed many other restrictions.

Many small investors believe the hard market declines are the result of manipulation by the government and large investors.

“The government will certainly look into if there is any manipulation,” said Bangladesh Finance Minister Ama Muhith.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s