A free fall in the stock market this week is now panicking investors throwing the stability of the market in doubt. DSE’s key price index on Monday dropped to its lowest since August 31 prompting investors to take to the street demonstrating in front of the stock exchange building for action to stop further fall. Trading was quite brisk from early this year and the year before. It however reminds us how a sudden market debacle caused investors to lose everything which happened at least twice in the last decade. We hope the situation should not be the same again. The DSE is now flooded with rumors of price manipulation and arranged trading by powerful syndicates.
The DSE benchmark index fell by 482 points and dropped to 6.54 points over the past 11 trading days. The situation took a dramatic turn when rumor spread that the chairman of BSEC is going to resign this week. The market opened with intensified selling pressure on Monday and the DSEX broke below the 6,850 points before noon from above 7,200 early this month. The market loss on Monday was the highest single-day slump since April 11. Earlier BSEC officials said they had identified 9 big firms which were manipulating prices and trading on the floor adding further investigations are underway. We must seek to know as to why the BSEC chairman wants to resign. Is he failing to check big internal trading manipulators? Under the previous chairman such big manipulators dominated the market and made fortune over the years while small traders lost everything.
We must say shocked samll investors’ confidence must be restored in the market by tightening internal governance and discipline. Stock market provides the much needed capital for corporate business and funds to the government for development. If it faces a debacle again its impact will be dangerous on the economy and the financial institutions. Many thought it was a market correction but now it seems to be a big slide to cause instability in the market. We are afraid the stock market may face a big debacle again and it must be protected. All market syndication must be wiped out and arranged trading needs to be stopped. The bourse must be stabilised before reaching a big debacle point.
