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Record stock dip triggers violent protests in Bangladesh

By Farid Ahmed, For CNN
Angry protesters blocked traffic and burned furniture in front of the Dhaka Stock Exchange in Bangladesh on Monday.
Angry protesters blocked traffic and burned furniture in front of the Dhaka Stock Exchange in Bangladesh on Monday.
STORY HIGHLIGHTS
  • Dramatic drop in DGEN index prompts protests
  • Protesters say market being manipulated by large investors
  • Index fell 9.25% with an hour of opening Monday
RELATED TOPICS
  • Bangladesh
  • Dhaka

Dhaka, Bangladesh (CNN) -- Thousands of angry protesters took to the street in downtown Dhaka and other major cities as regulators halted trading on the country's prime Dhaka Stock Exchange after the DGEN index fell a record 9.25% within an hour of opening on Monday.

After Sunday's record fall of 600 points, the market began at 10 a.m., but it nose-dived within an hoursetting a record fall.

The authority instantly halted the trading as the DGEN index dipped to 660 points in an hour triggering off violent protests.

A notice on the DSE website reads, "Today's (10-01-2011) market has been halted as per SEC's (Security and Exchange Commission) order, it will be resumed after further announcement."

All the top SEC and DSE executives sat in an emergency meeting and a DSE spokesman said the decision was taken to safeguard the tens of thousands of small investors who went on a selling spree in panic Monday morning.

Many investors in the street, however, claimed the index dipped due to manipulation by some big investors.

"I've lost my capital here... I didn't have any job... I borrowed taka 300,000 (US$4285) from my relatives and invested... two thirds of the capital has gone... I've become a pauper... how can I repay the loan?" lamented an investor, Abdur Rahim.

Like Rahim, thousands of angry investors, who lost their money, immediately took to the street in downtown Motijheel and its adjoining areas -- defying large contingents of anti-riot police -- and damaged cars and buses.

They took control of more than a kilometre of the street, blocking traffic movement and burning used tires and broken furniture in the capital's commercial hub.

The protests also spread many parts of the country including the southern port city of Chittagong, holy shrine city of Sylhet and many other places.

Protesters marched in groups chanting anti-government slogans for not intervening before the market plunged and blocking the roads to traffic.

"The government will certainly look into if there is any manipulation," Bangladesh Finance Minister AMA Muhith said.

In Dhaka, police used clubs and water canon to disperse the violent protesters who pelted chunks of bricks and small stones at police in retaliation.

Earlier, the biggest fall in a single day was on December 19 last year when DGEN slipped 552 points or 6.73 percent.

The investors took a bumpy ride of a rollercoaster in recent weeks as they saw a record peak of 80 percent rise on December 5 and subsequently saw a nosedive after three days prompting protests in Dhaka and elsewhere in the country.

In a bid to settle the market, the SEC on Sunday morning lifted the bank loan ceiling of 100 million taka (about US$ 1.43 million) for investing in the stock market and eased many other restrictions but those steps could not stop the price erosion on Monday.

said.

In Dhaka, police used clubs and water canon to disperse the violent protesters who pelted chunks of bricks and small stones at police in retaliation.

Earlier, the biggest fall in a single day was on December 19 last year when the DGEN index slipped 552 points or 6.73 percent.

The investors took a bumpy ride of a rollercoaster in recent weeks as they saw a record 80% rise on December 5 and subsequently saw a nosedive after three days prompting protests in Dhaka and elsewhere in the country.

In a bid to settle the market, the SEC on Sunday morning lifted the bank loan ceiling of 100 million taka (about US$1.43 million) for investing in the stock market and eased many other restrictions, but those steps did not stop the price erosion on Monday.

 
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