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Dhaka - Police baton-charged investors in the Bangladeshi capital Dhaka on Monday as angry crowds vented their fury after the stock market tumbled more than 9% in an hour.
Trading on the Dhaka Stock Exchange was halted when stocks fell a record 9.25% soon after opening in a plunge that sent outraged investors onto the streets. Some burned furniture as riot police struggled to keep control.
The benchmark Dhaka Stock Exchange general index (DGEN) rose 80% in 2010 but has suffered a series of falls in the past three weeks in what analysts describe as a much-needed correction.
"The exchange has halted trading as per orders from the Securities and Exchange Commission after the benchmark index plunged 660 points, or 9.25%, in the first 54 minutes of trading," spokesperson Shafiqual Islam said.
Police baton-charged the crowd outside the stock exchange building in central Dhaka, as the protesters chanted slogans against the government and market regulators.
"I lost five million taka ($70 000) out of a 10 million taka investment. This is insane - my whole savings are gone," investor Monirul Islam said at the scene.
Buses of riot police arrived as surrounding offices barricaded their gates and windows in anticipation of further clashes.
"There are up to 5 000 investors holding protests on the streets in front of the exchange building. Some of them have been violent," police inspector Azizul Haq said.
"They have started vandalising government property, which forced us to use batons against them."
Since December 5, when the DGEN hit a record high of 8 918.51, it has lost 27.4%, which many experts have called a necessary correction.
'We have lost everything'
Monday's fall was the largest single day loss in the bourse's 55-year history.
"I poured all my money into the Dhaka stock exchange," Humayum Kabir said "The finance minister lured us into the stock market, he told us it was safe, but now we have lost everything.
"They artificially jacked up the prices of junk shares and now our savings have vanished."
The DSE's market capitalisation hit a record $50bn in early December, but has since shed over $10bn as regulators moved to cool the over-heated bourse.
The DSE is tiny compared to other regional or global markets - the Bombay Stock Exchange has a market cap of around $1.3 trillion - but the impact of a major crash may have dramatic consequences for Bangladesh.
The number of investors has nearly doubled in the last 15 months to some 3.3 million people.
On December 15, the Bangladesh Bank raised the cash reserve requirement (CRR) by 50 basis points, tightening money supply in a bid to rein in soaring inflation.
Analysts and protesters say this is what triggered the current collapse as some banks, which had invested heavily in the market, tried to offload their shares quickly in an attempt to meet the new capital requirements.
"We always knew any fall would be nasty - now things are getting nasty," Reaz Islam, head of New York-based LR Global fund said.
"The market was unsustainably high. This was all expected. Panic selling by retail investors led to the crash."
"More than 70% of investors are small investors. Most invest without looking at the fundamentals of the market and these people are very emotional - they are very hurt by this," he said.
Impoverished Bangladesh has enjoyed an average 6% annual economic growth rate over the last eight years.
The stock exchange has yet to announce when trading will resume.
Other recent protests against market falls have seen riot police pelted with bricks and unrest spreading to other cities in Bangladesh.
Trading on the Dhaka Stock Exchange was halted when stocks fell a record 9.25% soon after opening in a plunge that sent outraged investors onto the streets. Some burned furniture as riot police struggled to keep control.
The benchmark Dhaka Stock Exchange general index (DGEN) rose 80% in 2010 but has suffered a series of falls in the past three weeks in what analysts describe as a much-needed correction.
"The exchange has halted trading as per orders from the Securities and Exchange Commission after the benchmark index plunged 660 points, or 9.25%, in the first 54 minutes of trading," spokesperson Shafiqual Islam said.
Police baton-charged the crowd outside the stock exchange building in central Dhaka, as the protesters chanted slogans against the government and market regulators.
"I lost five million taka ($70 000) out of a 10 million taka investment. This is insane - my whole savings are gone," investor Monirul Islam said at the scene.
Buses of riot police arrived as surrounding offices barricaded their gates and windows in anticipation of further clashes.
"There are up to 5 000 investors holding protests on the streets in front of the exchange building. Some of them have been violent," police inspector Azizul Haq said.
"They have started vandalising government property, which forced us to use batons against them."
Since December 5, when the DGEN hit a record high of 8 918.51, it has lost 27.4%, which many experts have called a necessary correction.
'We have lost everything'
Monday's fall was the largest single day loss in the bourse's 55-year history.
"I poured all my money into the Dhaka stock exchange," Humayum Kabir said "The finance minister lured us into the stock market, he told us it was safe, but now we have lost everything.
"They artificially jacked up the prices of junk shares and now our savings have vanished."
The DSE's market capitalisation hit a record $50bn in early December, but has since shed over $10bn as regulators moved to cool the over-heated bourse.
The DSE is tiny compared to other regional or global markets - the Bombay Stock Exchange has a market cap of around $1.3 trillion - but the impact of a major crash may have dramatic consequences for Bangladesh.
The number of investors has nearly doubled in the last 15 months to some 3.3 million people.
On December 15, the Bangladesh Bank raised the cash reserve requirement (CRR) by 50 basis points, tightening money supply in a bid to rein in soaring inflation.
Analysts and protesters say this is what triggered the current collapse as some banks, which had invested heavily in the market, tried to offload their shares quickly in an attempt to meet the new capital requirements.
"We always knew any fall would be nasty - now things are getting nasty," Reaz Islam, head of New York-based LR Global fund said.
"The market was unsustainably high. This was all expected. Panic selling by retail investors led to the crash."
"More than 70% of investors are small investors. Most invest without looking at the fundamentals of the market and these people are very emotional - they are very hurt by this," he said.
Impoverished Bangladesh has enjoyed an average 6% annual economic growth rate over the last eight years.
The stock exchange has yet to announce when trading will resume.
Other recent protests against market falls have seen riot police pelted with bricks and unrest spreading to other cities in Bangladesh.
