You are currently browsing the tag archive for the ‘Bangladesh’ tag.

Few stock exchanges can claim to have had as eventful a 2011 as the Dhaka bourse. Following riots after a steep daily drop last month, the market has been no less fiery so far this year, with authorities suspending trading on Monday after a morning plunge of more than 9% in less than a hour saw investors (again) take to the streets. Just as dramatic, the exchange’s main index soared by more than 15% yesterday (and added another 2% today for good measure).

Following the demonstrations earlier this week, officials relaxed recently imposed rules on banks’ exposure to the stockmarket, a key driver behind Monday’s fall. But this risks re-inflating a dangerous-looking bubble; although down by 7% so far this year, the market gained more than 80% in 2010. Investors’ wild mood swings are unlikely to be tamed by the rather quaint advice issued by the bourse at the start of trading each day:

“Good morning hon’ble Investors; make your investment decision based on company fundamentals, technical analysis, price level, disclosed information; and avoid rumor based speculations.”

Advertisements

In May, a “flash crash” wiped off nearly 1,000 points—or around 9%—in the value of the Dow Jones Industrial Average in a matter of minutes. The index quickly rebounded, ending the day 3% lower.

Yesterday, the Dhaka Stock Exchange suffered a sudden drop in value, with the broad market index shedding 550 points—around 6%—in early trading. Although the decline unfolded over an hour-and-a-half, it also had an element of “flash”; a group of investors took to the streets and set fires while chanting angry slogans at the exchange’s bosses and national securities regulators.

In the end, the index closed the day down by less than 2%. It was the third consecutive daily decline, a rarity for an exchange that is up by almost 90% year-to-date. (The Dow Jones Industrials is up by only 9% so far this year.)

The Dhaka index added 1.5% in trading today. The streets were peaceful.

Archives

Advertisements