DHAKA stocks’ meltdown continued on Tuesday. And the panic-stricken investors are frantically trying to save their shares in the worst spell of market fall after the 2010-2011 market crash. The DSEX, key index of the Dhaka Stock Exchange lost 87.24 points to close at 4,036.23 points on Tuesday. The market has been in turmoil for 11 months causing the DSEX to fall by 1,914 points and the DSE market capitalisation to slump by more than Tk 1.06 lakh crore. The market went into free fall from the beginning of the season that continued until the end of the session. The sales mounted on the day as there was no visible move from any quarter to check the plunge and instill confidence in the market. The market collapsed as investors’ confidence grounded amid a prolonged bearish vibe in the market, the government’s apathy towards the capital market, depressing macroeconomic data, pressure on the financial sector, and Robi and grameenPhone’s tussle with the regulator.
The current precarious situation was rooted in the rise of wrongdoings in the market, falsification of financial statements, approval of initial public offerings by weak companies with huge placement shares, unpredictable regulations and no product diversification. The market was going through a worsening situation after the debacle in 2010-11 as a large number of ill-fated small investors lost their whole investment. The country under the Awami League rule has experienced two major stock market crashes- one in 1996 and the other in 2010. There was a big bubble followed by a catastrophic crash in 1996. A number of affected investors recently staged demonstrations in front of the Motijheel DSE office against the relentless fall in the market. They demanded the resignation of the Securities Exchange Commission chairman and fix the market immediately.
We do believe the plunge would accelerate if the government does not intervene immediately. There is a need to drastically reshuffling the current regulatory commission in order to improve the market situation.
