DSEX, the benchmark index of the Dhaka Stock Exchange, closed at 5,077 points after soaring 111 points, or 2.24 percent — the biggest single day leap since January 8. Between June 28 and July 22, the index had lost 463.6 points and investors’ Tk 27,500 crore were wiped out. According to a local daily’s report, the investors had to count a loss of about Tk 4,358 crore just in a single day trading. The extreme sufferers are those who had invested money taking loan from banks or other individuals. Most of them were ‘forced to sale’ their shares for pay back the lending money.
The newspaper report said only in 15 days — after passing national budget in the Parliament on June 30– the investors have lost a total of Tk 27, 000 crore. The overall market capital of DSE came down to Tk 3,73,000 crore from Tk 4,00,000 crore due to rate fall of different company’s shares. It was a ‘free fall’. Apparently, there was nobody’s control on the share market, except fraud syndicate.
The newspaper report said only in 15 days — after passing national budget in the Parliament on June 30– the investors have lost a total of Tk 27, 000 crore. The overall market capital of DSE came down to Tk 3,73,000 crore from Tk 4,00,000 crore due to rate fall of different company’s shares. It was a ‘free fall’. Apparently, there was nobody’s control on the share market, except fraud syndicate.
We observe that, the country’s stock market has been experiencing a ‘controlled’ fluctuation between bullish and bearish trends, the index shooting up and then plunging down within just a matter of two or three months. Coteries of investors are manipulating the market to bring it under their control. They are using politics, the election and other national issues, including the budget, to spread rumours and drive the market index up and down to suit their interests.
Market analysts, observing the performance of the country’s main bourse DSE over the past five years, say that there has been a controlled manipulation of the market, causing differences in the index by 400 to 800 points. After the 2010 crash, there has been a sort of controlled rise and fall in the market. It seems that the market is being manipulated to gain control. There needs to be an investigation into the matter or else the common investors will suffer.
Common investors are encouraged to buy shares when the indexes are up. That is when the big investors sell their shares and become inactive. The index thus plummets and when it reaches a certain low, these big investors start buying up the shares. When the prices go up, the common investors become active in the market and then the big investors start selling. They make a profit and then temporarily draw back.
The large companies have a lot of influence on the market trends. The value of these companies’ shares goes up and the index falls. The manipulators sell the shares of the big companies, driving the indexes up and down. The companies resort to pumping and dumping, selling cheaply purchased stock at higher prices.
There are around 25 to 30 such companies whose prices have gone up abnormally over the past one year for no apparent reason. Market analysts also blame the inflated trading of valueless company IPOs and placement shares for the market’s liquidity crisis. A thriving informal placement market has emerged outside of the secondary market. Common investors are lured to withdraw their money from the market and invest this in placements. This is a major reason behind the market’s liquidity crisis. Placements lead to forward sales, buying shares cheaply and selling it to another at higher prices.
Earlier in a big incident of share market lootings, there were widespread allegations that some high-profile businessmen linked to the government high-ups were directly involved with taking away the money. Following huge protest from the investors, a probe committee was formed to investigate the stock market crash on 24 January 2011, with former Bangladesh Bank Governor Ibrahim Khaled heading the four-man high-powered committee. But the reports of the committees were not published. Expressing frustration, former Finance Minister AMA Muhith had said he could not disclose the names of the culprits as they were highly influential.
