The general index of the Dhaka Stock Exchange on Sunday experienced the biggest single-day plunge of 600 points for the first time ever in its history as panic-stricken investors went for heavy selling.
Although the Securities and Exchange Commission, before the day’s trading began, had made a number of decisions including increasing the ceiling of loans for investors, the move could not halt the slide of stocks, which plunged by a 1,169 points in five trading days.
Panicked investors failed to hold protests as a large number of law enforcers equipped with a water cannon had been deployed in the place at Motijheel before the day’s trading began.
Investors in Jessore, Rajshahi, Khulna, Sylhet and Chittagong, however, went out on demonstrations.
The market began the day on a positive note after the SEC had held a meeting with high officials of the Dhaka and Chittagong stock markets and leaders of the merchant bankers’ association to find out a way to build confidence in share market investors.
The SEC decided to withdraw the single-client credit exposure limit of Tk 10 crore and reduced the time limit to 15 days from the earlier 30 days for new beneficiary ownership account holders to be eligible for share credit.
The SEC also decided to allow Grameenphone shareholders to get netting facilities from now on which will allow investors to invest their money from the day’s sales of shares in other shares on the day.
But the market began to slide 30 minutes inside the beginning of day’s trading.
As soon as the market started declining, panic gripped the investors, who sold off shares for whatever prices they could.
The DSE general index fell by 7.75 per cent with the index reaching 7,135.02 points at the day’s closing.
The DSE general index lost 551.77 points on December 19. It has remained the second highest single-day fall in the history of the bourse. The market fell by 234 points in a single day during the 1996 share scam.
Investors claimed that the Bangladesh Bank’s inaction regarding the current market situation panicked the investors, who expected that the central bank would do something to increase money flow into the market.
Investors also became panicked because of the tightened security measures in the areas of the DSE building. Investors and the law enforcers chased each other several times.
The police dispersed investors as they tried to go out on demonstrations in the wake of the share market decline.
The police warned the investors saying that they would arrest anyone holding protests during the trading.
The police picked up an investor from in front of the DSE building as he tried to hold protests.
The police also detained six investors on Thursday in front of the DSE building on charges of vandalising vehicles during a rally against the continuing slide in share prices for four consecutive days.
The detained Mamun, a client of the Synthia Securities, is a student of Jagannath University and his MBA exams are scheduled to begin on January 25.
Motijheel police subinspector Tajul said they were preparing to file a case against the arrested.
Arif Ahmed, a small investor, alleged that the DSE authorities and the government acknowledged that the market had dropped massively on the opening day of the week for which the government heightened security.
‘I lost all the money I borrowed from my uncle as the market kept dropping,’ he added.
Minhajul Abedin, another small investor, said the SEC and the Bangladesh Bank had not issued any stringent directives when the market index was continuously skyrocketing.
The way the SEC is taking short-term measures to cool the overheated stock market is unethical, he added.
Shireen Ahmed, a retired government official, said, ‘I lost most of my investment as the situation of the DSE and the SEC panicked the investors.’ The fall in the share market is more grave than it was in 1996, he added.
The SEC chairman, Ziaul Haque Khandkar, said, ‘I request investors to keep patience in this situation of the capital market.’
The commission will take long-term measures to boost up investor’s confidence in the market, he added.
Salahuddin Ahmed Khan, a former chief executive officer of the Dhaka bourse who took back to teaching in the finance department in Dhaka University, said credit crisis of banks and non-bank financial institutions and panic selling by investors had pushed down the market although the SEC had made four decisions to increase investor’s confidence.
All the commission directives failed to increase investor’s confidence, he added.
Most of the merchant banks failed to give the maximum limit of margin loan ratio as they faced credit crunch, said a stockbroker.
Banks and non-bank financial institutions are reluctant to inject fresh fund into the capital market under the strong monitoring system of the central bank.
Akter H Sananmat, managing director of the Prime Finance and Investment, said there should be coordination between the SEC directives and the present situation of the financial sectors.
All the SEC directives failed to increase investor’s confidence in the bearish market, he added.
Hundreds of investors in Rajshahi brought out a procession from the Investment Corporation of Bangladesh trade centre. They also held a rally at Saheb Bazar after parading the city roads.
They had blocked a stretch of the Rajshahi–Natore highway at Saheb Bazar for an hour, suspending traffic. More than 200 vehicles remained stranded the both ends of the road stretch.
A large number of law enforcers from the Boalia police station dispersed the protesters.
The investors then went back to the ICB trade centre and confined the manager of the ICB Security Trading Company Limited to his office for some time, sources said.
Investors in Jessore also went out on demonstrations after the fall in the share market.
Investors of the Royal Capital and the Joytun Securities International took to the streets about midday and rallied. They started fire with papers and tyres on the road causing traffic congestion. The police later controlled the situation.
