Tags: Bangladesh Police | Investors Clash as Stocks Plunge

Bangladesh Police, Investors Clash as Stocks Plunge

Monday, 10 Jan 2011 02:07 PM

Bangladesh police fired tear gas and water cannon to break up violent protests by investors on Monday after stock trading was halted when prices went into free fall.

The benchmark index shed 8.9 percent in less than an hour of trading, its steepest-ever slide, according to updated figures from the stock exchange. That followed a 6.7 percent drop on Sunday after the market had been battered for weeks.

Thousands of angry investors vandalized cars and blocked roads around the Dhaka Stock Exchange, the main bourse, before police moved in. Protesters chanted slogans complaining of manipulation of stock prices by dishonest brokers and traders.

The Securities and Exchange Commission (SEC), after an emergency meeting with the central bank, said trading would resume on Tuesday at 11 a.m. local time (0500 GMT) as normal.

Prices of shares nearly doubled in 2010, encouraging a stream of new investors into the markets, but prices have crumbled since early last month after the market regulator and central bank took measures to cool the market, prompting frequent street protests.

The benchmark index has lost more than 27 percent since Dec. 5. The value of the market, which surged by more than 80 percent in 2010, fell by a total 427 billion taka ($6 billion) on Sunday and Monday. Market capitalization was $41 billion on Monday, the stock exchange said.

"Authorities must take steps to protect the rights of the small investors and also to save the stocks from being pulled down or up whimsically," investor Mehedi Hasan said.

"Investors should refrain from panic selling of their shares while regulators should have intervened when the market started rising abnormally," former SEC chairman Faruk Ahmed Siddiqi said.

The central bank has raised banks' cash requirement ratio from 5.5 percent to 6 percent, effective Dec. 15, to rein in inflation and to curb runaway credit flow, especially to the volatile capital markets.

Call money market rates also hit a record high last month.

Some banks have invested 75 percent of their deposits in the stock market against a ceiling of 10 percent and had been told to get back under the limit by Dec. 30. This deadline has now been extended to Jan. 15.

© 2017 Thomson/Reuters. All rights reserved.

 
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Bangladesh police fired tear gas and water cannon to break up violent protests by investors on Monday after stock trading was halted when prices went into free fall. The benchmark index shed 8.9 percent in less than an hour of trading, its steepest-ever slide, according...
Bangladesh Police,Investors Clash as Stocks Plunge
365
2011-07-10
Monday, 10 Jan 2011 02:07 PM
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