FE Report (January 19, 2011)
The SEC suspended trading of both the bourses again Tuesday due to free fall of share prices followed by investors' street protest.
The Securities and Exchange Commission (SEC) instructed the two bourses to halt trading after the general index of Dhaka Stock Exchange (DSE) plunged by 243 points or 3.29 per cent and Selective Categories Index of Chittagong Stock Exchange (CSE) by 298 points at about 1:40pm.
However, normal share trading will resume at 11:00am today (Wednesday) and continue as usual, the authorities said.
The SEC suspended share trading of the two bourses for the second time within eight days. On January 10, the SEC suspended share trading of the bourses when Dhaka stocks declined by 660 points or 9.0 per cent and Chittagong stocks by 914 points within 50 minutes of the start of the day's trading.
Hundreds of angry investors came out from the brokerage houses and gathered in front of the DSE main building at about 12:45pm, after the DGEN lost 203 points. They staged demonstration, protesting the continuous fall of share prices, and chanted slogans against the market regulators and the DSE top bosses.
They also demanded explanation from the authorities concerned about the continuous fall of share prices and probe into the recent bearish trend of the market to detect whether vested quarters are involved in it.
However, no untoward incident occurred, as additional law-enforcers were deployed in front of the DSE building from the early morning.
"We, the small investors, are the worst victims of the continuous plunge, while most of the big players, who could somehow smell the imminent fall, had withdrawn major portion of their investment after making profit," said an investor. Another investor said he has lost most of his savings in the recent market fall.
The market opened Tuesday with a negative note and gradually went down. The benchmark DSE General Index (DGEN) closed at 7140.29, down by 3.22 per cent or 237.33 points. The broader DSE All Shares Price Index (DSI) ended at 5925.46, shedding 3.19 per cent or 195.43 points. The DSE-20 index lost 2.80 per cent or 131.60 points to 4572.52.
Out of the 244 issues traded, only 10 advanced and 234 declined. Turnover stood at only Tk 6.10 billion during the two hours and 40 minutes trading.
The benchmark index of the Dhaka stocks suffered shock for four consecutive sessions and lost more than 550 points or 7.16 per cent.
The DGEN rose 80 per cent in 2010, but has been volatile since the record high of 8,918.15 points on December 5, 2010.
"Although a correction in share prices was expected anytime last year, following abnormal rise in the market, the current situation is due mainly to liquidity crisis," analysts said.
Professor Abu Ahmed of Economics Department, Dhaka University, said, "Mainly liquidity crunch affects the stock market, as the money market is still volatile."
"The lenders cannot disburse loan, as they are still suffering from liquidity crunch. They cannot buy shares due to fund shortage," he said.
"The market will not come out from the bearish mood unless the money market is stable," he added.
Echoing him, Prime Finance and Investment MD Akter H Sannamat said, "In this situation, the small investors have lost confidence and they are gradually getting panicked."
AIMS Bangladesh MD Yawar Sayeed said, "Tuesday's suspension of share trading by the SEC was unexpected."
Earlier on January 10, angry investors took to the streets across the country after the SEC suspended trading following the record fall of share prices.
They staged demonstrations, engaged in sporadic clashes with policemen, vandalised vehicles and blocked traffic movement for about four hours at Motijheel and adjoining areas in the city.
Police lobbed teargas canisters to disperse the agitated investors. At least nine persons, including four newsmen, were injured during the clashes between the investors and the policemen.
In the same day, the SEC and Bangladesh Bank took a series of measures in a desperate effort to bring back the investors' confidence and stablise the market. But, all the efforts failed to make any impact on the stock market.
The SEC suspended trading of both the bourses again Tuesday due to free fall of share prices followed by investors' street protest.
The Securities and Exchange Commission (SEC) instructed the two bourses to halt trading after the general index of Dhaka Stock Exchange (DSE) plunged by 243 points or 3.29 per cent and Selective Categories Index of Chittagong Stock Exchange (CSE) by 298 points at about 1:40pm.
However, normal share trading will resume at 11:00am today (Wednesday) and continue as usual, the authorities said.
The SEC suspended share trading of the two bourses for the second time within eight days. On January 10, the SEC suspended share trading of the bourses when Dhaka stocks declined by 660 points or 9.0 per cent and Chittagong stocks by 914 points within 50 minutes of the start of the day's trading.
Hundreds of angry investors came out from the brokerage houses and gathered in front of the DSE main building at about 12:45pm, after the DGEN lost 203 points. They staged demonstration, protesting the continuous fall of share prices, and chanted slogans against the market regulators and the DSE top bosses.
They also demanded explanation from the authorities concerned about the continuous fall of share prices and probe into the recent bearish trend of the market to detect whether vested quarters are involved in it.
However, no untoward incident occurred, as additional law-enforcers were deployed in front of the DSE building from the early morning.
"We, the small investors, are the worst victims of the continuous plunge, while most of the big players, who could somehow smell the imminent fall, had withdrawn major portion of their investment after making profit," said an investor. Another investor said he has lost most of his savings in the recent market fall.
The market opened Tuesday with a negative note and gradually went down. The benchmark DSE General Index (DGEN) closed at 7140.29, down by 3.22 per cent or 237.33 points. The broader DSE All Shares Price Index (DSI) ended at 5925.46, shedding 3.19 per cent or 195.43 points. The DSE-20 index lost 2.80 per cent or 131.60 points to 4572.52.
Out of the 244 issues traded, only 10 advanced and 234 declined. Turnover stood at only Tk 6.10 billion during the two hours and 40 minutes trading.
The benchmark index of the Dhaka stocks suffered shock for four consecutive sessions and lost more than 550 points or 7.16 per cent.
The DGEN rose 80 per cent in 2010, but has been volatile since the record high of 8,918.15 points on December 5, 2010.
"Although a correction in share prices was expected anytime last year, following abnormal rise in the market, the current situation is due mainly to liquidity crisis," analysts said.
Professor Abu Ahmed of Economics Department, Dhaka University, said, "Mainly liquidity crunch affects the stock market, as the money market is still volatile."
"The lenders cannot disburse loan, as they are still suffering from liquidity crunch. They cannot buy shares due to fund shortage," he said.
"The market will not come out from the bearish mood unless the money market is stable," he added.
Echoing him, Prime Finance and Investment MD Akter H Sannamat said, "In this situation, the small investors have lost confidence and they are gradually getting panicked."
AIMS Bangladesh MD Yawar Sayeed said, "Tuesday's suspension of share trading by the SEC was unexpected."
Earlier on January 10, angry investors took to the streets across the country after the SEC suspended trading following the record fall of share prices.
They staged demonstrations, engaged in sporadic clashes with policemen, vandalised vehicles and blocked traffic movement for about four hours at Motijheel and adjoining areas in the city.
Police lobbed teargas canisters to disperse the agitated investors. At least nine persons, including four newsmen, were injured during the clashes between the investors and the policemen.
In the same day, the SEC and Bangladesh Bank took a series of measures in a desperate effort to bring back the investors' confidence and stablise the market. But, all the efforts failed to make any impact on the stock market.
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