SUDDEN plunge in the benchmark of a bullish share market left most investors in shock in the Dhaka Stock Exchange (DSE) on Sunday leaving them to wonder whether or not it is a major correction or an ominous sign of market disorder. The stock market in Chittagong also felt the shock. Many believe the plunge in the DSE price index occurred following the announcement of the new monetary policy of the central bank on Thursday, which called for tight control of banks’ investment in the bourse and restraint overexposure of portfolio to the stocks.
The stock market is a sensitive place, which needs to be closely controlled by competent authorities, but any undue alarm is harmful that creates panic and prompt investors to sell shares to bring about greater plunge in share prices. In fact small investors put money in the bourse because they have no other safe place for investment. They earn small income to maintain families. But panic grips the market at the opening of the week on Sunday. The central bank’s call for caution may have caused the market reaction apparently too much. But it appears the market quickly stabilized on Monday – one day after the big fall.
We want to believe the DSE Chief when he says the market is quite stable in recent times, and undue alert for caution caused harm to it. But what is to be kept in mind is that market manipulators are always active to destabilize the market and harvest the windfall. So, strong monitoring and regulation can effectively control market and protect small investors’ interest. As the bourse started to become bullish, Bangladesh Bank, the Securities and Exchange Commission (SEC) and experts from public and private organizations, among others rightly called for cautious investment and vigilance on the market. They reminded the investors to be selective.
Amidst the call, the DSEX finished at 5,500.85 points on Sunday, shedding 2.09 per cent or 117.79 points, which is the highest single day fall after the market crash in July 23, 2013. Stockbrokers attributed the Sunday’s fall to indiscriminate sale of shares following call for tighter market control by Bangladesh Bank at the weekend. We have to say the reminder was good but it should have come in measured tone to avoid panic.
It is no secret that under political backup dishonest traders and business houses already made crore of taka manipulating trading in the bourse and robbing small investors. They are on the wait to repeat the market crash of 1996 and 2010. So market monitoring is quite important, there is no alternative to caution for small investors to protect their capital in the first place. We also ask the government regulatory bodies to be vigilant to keep the market stable instead of helping the manipulators as many of their officials did in the past.
The stock market is a sensitive place, which needs to be closely controlled by competent authorities, but any undue alarm is harmful that creates panic and prompt investors to sell shares to bring about greater plunge in share prices. In fact small investors put money in the bourse because they have no other safe place for investment. They earn small income to maintain families. But panic grips the market at the opening of the week on Sunday. The central bank’s call for caution may have caused the market reaction apparently too much. But it appears the market quickly stabilized on Monday – one day after the big fall.
We want to believe the DSE Chief when he says the market is quite stable in recent times, and undue alert for caution caused harm to it. But what is to be kept in mind is that market manipulators are always active to destabilize the market and harvest the windfall. So, strong monitoring and regulation can effectively control market and protect small investors’ interest. As the bourse started to become bullish, Bangladesh Bank, the Securities and Exchange Commission (SEC) and experts from public and private organizations, among others rightly called for cautious investment and vigilance on the market. They reminded the investors to be selective.
Amidst the call, the DSEX finished at 5,500.85 points on Sunday, shedding 2.09 per cent or 117.79 points, which is the highest single day fall after the market crash in July 23, 2013. Stockbrokers attributed the Sunday’s fall to indiscriminate sale of shares following call for tighter market control by Bangladesh Bank at the weekend. We have to say the reminder was good but it should have come in measured tone to avoid panic.
It is no secret that under political backup dishonest traders and business houses already made crore of taka manipulating trading in the bourse and robbing small investors. They are on the wait to repeat the market crash of 1996 and 2010. So market monitoring is quite important, there is no alternative to caution for small investors to protect their capital in the first place. We also ask the government regulatory bodies to be vigilant to keep the market stable instead of helping the manipulators as many of their officials did in the past.
