Freefall continues at stock market

Scrips on the Dhaka Stock Exchange continued to experience a freefall for the third straight session on Sunday, sending the benchmark index to an eight-month low as panic selling pressure accelerated. Indices started to nosedive since the market opened on Sunday until close of the trade as investors confidence continued to erode. The benchmark index DGEN tumbled 474 points or 7.27% to 6255, the level seen before May 5, 2010. It was the second largest single-day fall since the circuit breaker had been introduced on January 19, 2011 to prevent market’s big fall. Violent protests, which entered its fifth day today, erupted on the streets of the country’s commercial heart, Motijheel, after the index lost more than 250 points around noon. Police used batons to break up hundreds of investors who again took to the streets in protest against tumbling stock prices. It took three hours to be in control.

Investors pelted policemen with brickbats from the roof tops of buildings close to the stock exchanges. They also vented their anger by chanting slogans and setting fires to wood and other substances. Investors demanded that the government come up with a solution to restore confidence to the market. One investor said that steps taken by the regulators have failed to get any grip on the volatile market. “We cannot bear losses any more, we are close to bankruptcy,” Tito, an investor, lamented.

The DGEN declined more than 30 per cent since December 5, when it hit a record high. On January 25, the government formed a probe committee, which would submit a report on the market collapse within two months.“Investors’ confidence has totally been shattered. There is nothing more than that,” said Mahmood Osman Imam, professor of finance at Dhaka University. “Prices of many scrips have now come down to the level of worth investing,” he said, adding that the government might refinance its organisations to sustain the market at this level and to restore investor confidence.