Stocks dip to a year-low
Hundreds of small investors took to the streets in front of the country's premier bourse yesterday protesting a fall in share prices for the fifth day.
At the end of four-hour trading, the General Index of Dhaka Stock Exchange nosedived 260 points, or 4.7 percent, to 5,203, hitting the lowest level in the last one year. The general index has lost 1,184 points in the past five days.
The demonstrations halted traffic from the Ittefaq crossing to Shapla Square for three hours until the police stepped in .
The investors chanted slogans against the government and claimed that the initiatives of the government have failed to halt the stock fall.
Positive and clear steps are needed from the government and the central bank to prop up the market, they added.
Experts said the continuing downfall shows a total lack of confidence prevailing in the market for a sustained period. Negative comments from the finance minister also fuelled the downtrend, they added.
Finance Minister AMA Muhith in parliament on Sunday termed retail investors as “fatkabazari” (opportunists), and said the government would formulate a law to stop speculative investments in the share market.
Most of the fresh investors now seem reluctant to participate in the market after the minister's comments, said market operators.
“I have lost all my money as the share market continued to fall for five days,” said a small investor. Most of the investors decided to leave the market as panic sell-offs continued, he added.
Market analysts said the state-run banks do not have enough buying power at present, as most of the state owned enterprises (SoE) are facing a credit crunch.
Saifur Rahman, executive director of Securities and Exchange Commission (SEC), said anyone can participate in trading with confidence.
Rahman said, in a bid to protect the small investors the commission has asked the merchant banks not to go for forced sales while the SoEs buy shares to stabilise the market.
"I have no statistics on what volume of shares the state owned companies will buy from the market," he added.
He requested the investors not to listen to any rumours. The market will be normal again soon, he claimed.
Akter H Sannamat, a market analyst, said the government should create a special fund to support the state companies to go for big buying of shares.
He also said that SEC could permit more than ten mutual funds to increase credit flow in the capital market.