01/10/2011, 00.00
BANGLADESH
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As shares take a nosedive, investors riot in Dhaka and Chittagong

This is the worst financial crash in the country’s history. More than three million investors lose big. Police cordons off streets around stock exchange buildings to stop riots.

Dhaka (AsiaNews/Agencies) –  Bangladesh’s main stock exchanges in Dhaka and Chittagong registered heavy losses today as share values plummeted. More than 5,000 investors took to the streets to protest, vandalising vehicles and shops as well as lighting bonfires. According to analysts, an estimated three million people lost money in the country’s worst financial crash.

In just a few hours, the DSE General (DGEN) Index, the benchmark index of the Dhaka Stock Exchange (DSE), slumped by 660 points. The Chittagong Stock Exchange (CSE) Index lost instead 914 points.

The Securities and Exchange Commission (SEC), the country’s regulatory agency, stopped trading to avoid further losses. Upon hearing the news, thousands of investors angrily marched to the stock exchange buildings, forcing police to cordon them off.

In recent years, stock markets in Bangladesh had attracted small investors betting on the rising value of the country’s mobile telephone companies and other firms. Shares have become a popular investment for ordinary people, often providing higher returns than bank deposits and savings. Last year for example, the DGEN climbed 80 per cent.

However, the growth also attracted speculators and market regulators recently decided to take measures to limit the proportion of deposits that banks can invest into the stock market  over concerns that shares were overvalued.

This move forced big institutional investors to withdraw from the market, triggering panic among individual investors.

Since early December, the benchmark index has lost more than 27 per cent.

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