Bangladeshis protest over stock prices plunge

DHAKA |
Mon Sep 19, 2011 5:11pm IST

DHAKA (Reuters) – Hundreds of angry Bangladeshi investors smashed vehicles, set tyres ablaze and blocked traffic near the stock exchange in the capital on Monday, in the most violent of a series of protests in recent weeks over plunging share prices.

They took to the streets after the general index at the Dhaka Stock Exchange dived nearly 100 points in early trading, following a more than 4 percent fall over the previous four sessions, brokers and witnesses said.

The index recovered slightly later in the day to end up 0.71 percent at 5,841.20 points.

“Disgruntled protesters vandalised five vehicles. We have arrested four people,” Tofazzal Hossain, a police officer in the area where the bourse is located, told Reuters. “The situation is now under control.”

Share prices nearly doubled in 2010, encouraging new investors to enter the market, but persistent declines since late last year have unleashed a series of violent protests halting trading several times.

The number of individual investors rose to 3.3 million from fewer than 500,000 in 2006. Many small investors took out large loans to invest in shares at a time when the weakness of the economy made shares look an attractive investment.

The government is struggling to boost the country’s capital market, which is reeling from a series of price crashes, while a high-powered committee found heavy manipulation in the stock market and blamed the market regulator for failing to oversee the situation.

The general index fell more than 40 percent to 5,203 on Feb. 28 from a high of 8,918.51 on Dec. 5, 2010.

“I invested all my savings in the share markets, but have lost everything. Now I am a pauper,” a sobbing small investor said.

The government injected a part of its 50 billion taka ($676 million) market development fund into the country’s two bourses in Dhaka and Chittagong, but still failed to fully restore investors’ confidence.

One stockbroker said the slide in confidence led to panic selling by retail investors, while banks and other institutions remained inactive.

(Reporting by Ruma Paul; Editing by Anis Ahmed and Sugita Katyal)

Article source: http://feeds.reuters.com/~r/reuters/INsouthAsiaNews/~3/nPWTCkPb-CQ/idINIndia-59423720110919

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