Investors take to streets again as stocks plunge

May 26, 2011

Share market investors took to the streets in rowdy demonstrations again on Wednesday protesting at the free fall of share prices as the Dhaka stocks plunged by 151.74 points on the day.
They shouted slogans demanding immediate resignation of the finance minister, the Bangladesh Bank governor and the Dhaka Stock Exchange president.
The investors at a rally during the demonstrations announced to hold sit- in front of the DSE building today and demanded that trading should be suspended until further government initiative to keep the market stable.
The index started declining fast as the trading on the DSE began. When the index lost about 140 points about 1:30pm, investors from brokerage houses made a furore. They, however, stayed indoors as heavy rain stopped them from coming out onto the streets.
When the rain stopped about 2:30pm and the index had shed 198 points by then, investors came out on the road and stopped traffic on the stretch from the Shapla Square to the Ittefaq crossing.
They brought out processions at regular intervals between 2:30pm and 4:00pm.
They said that fall of share prices had been taking place for five months made many investors flat broke as many of them lost most of their investments.
The investors for a few weeks have been on edge amid a rumour about possible capital gains tax in the forthcoming budget.
Fears that the government might impose capital gains tax and make mandatory the tax identification number for the opening of beneficiary owner’s account pushed the investors to blanket sell-off and it fuelled the recent market crash, market operators said.
But the finance minister, Abul Maal Abdul Muhith, is yet to make any announcement on the issues despite criticism by several lawmakers in the parliament on Monday.
Investors at the demonstrations termed the finance minister ‘mentally retarded’ and said that he was not worthy of holding such a crucial portfolio.
They also came down heavily on the Bangladesh Bank governor, Atiur Rahman, saying that the bank’s monetary policy on increase in cash reserve requirement and statuary liquidity ratio pushed the market to a fresh liquidity crisis.
The investors called off their protests for the day about 4:00pm. The police, however, did not do anything.
The general index of the Dhaka Stock Exchange lost 2.78 per cent to close the day at 5,292.53 points. The index lost 412 points in four trading sessions before Tuesday when it gained by 67 points.
The DEGN lost 1,250 points from April 7 when the committee investigation the January share scam submitted it report till Thursday.
Many investors looked shattered after the market crash on Wednesday. They claimed that the recent spell of market crash had made them paupers.
Nurul Haque, a client of the Saad Securities, said that he had lost more than 70 per cent of his investments in the market crash that began in January.
‘I vested Tk 1 crore in all but on Monday my portfolio balance stood at Tk 37 lakh.’
He said that about a half of his investment had been borrowed from his relatives. ‘Now they are pressuring me to repay the amount as they fear that they would not get the money back. But I have no way to repay the loans.’
The Dhaka Stock Exchange president, Shakil Rizvi, told New Age, ‘Sell pressure of subsidiary companies of banks had kept the market down over a few days as they were forced by the central bank to reduce the borrower’s limit for a single client.’
He, however, said that trading would not be suspended on Thursday.

 

Courtesy of New Age

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