Bangladesh stock traders protest in streets over market dive

DHAKA 2010 (AFP) - Riot police were deployed in Dhaka Wednesday as hundreds of investors from the stock exchange held street protests after shares fell more than six percent, the steepest ever single-day decline.

   Dealers said a “long overdue” price correction saw the benchmark DSE General Index tumble 6.35 percent to 8,039 points in the first hours of trading, pulled down by a 10-percent loss in banking shares.

   The market rebounded slightly around midday to show a fall of 3.14 percent as traders took to the streets and marched to the Securities and Exchange Commission offices.

   Traffic was brought to a halt for more than an hour in the busy Motijheel commercial district in central Dhaka and local television said riot police had been sent out to control traders who were burning office furniture.

   Reaz Islam, head of New York-based LR Global Fund, said a series of measures to cool the overheated stock exchange by the country’s Securities and Exchange Commission and the central bank had created panic among investors.

   Wednesday’s plunge followed a 2.11 percent loss on Tuesday and a 1.64 percent fall Monday after it hit a record high 8,918.51 Sunday.

   This week the SEC has delayed share transactions and the Bangladesh Bank ordered an investigation of the diversion into the market of funds meant to encourage investment in new industry.

   “People wanted to make money quickly so they bought into the stock exchange without knowing anything about market fundamentals and now they are paying the price,” said Islam.  

 “The fall was long overdue because most of the stocks were dangerously overheated.