Many blame liquidity shortage in the bourse for the plunge, but confidence shortage of investors in the wake of induction of a foreign strategic partner to DSE and growing political instability are also adding to the free fall. But many also fear the presence of certain unholy quarters to manipulate trading to grab small investors money.
The stock was laundered in 1996 and 2010-both under the Awami League government. Finance Minister AMA Muhith had laughed out the last market scam blaming small investors as to why they had put money in the stock market. Panicked by the growing plunge small investors yesterday demonstrated in front of the Dhaka Stock Exchange demanding the Finance Minister’s resignation along with removal of the chairman of Securities and Exchange Commission. They are right when they said the Finance Minister proved insensitive to small investors interest in the past to protect big people and he is equally indifferent now when the market is plunging. It needs strong leadership to save it.
In our view the government should be proactive to protect the market and small investors capital. But this is a government of the rich, where justice is beyond the reach of the poor. Only last month a special tribunal acquitted 8 stockbrokers and some trading companies, which were charged for stock market scam in 1996. Needless to say it will definitely encourage new market manipulation if protective measures were not put in place.
It is true Bangladesh Bank earlier this week has relaxed rules asking banks to increase buying in stock market to ease liquidity crisis to beef up trading. But there is hardly any reflection of it in trading. It appears panicked investors are selling their stock in haste fearing further fall while rich are buying at lower price. The capital market was bearish on Tuesday — the third in a row, amid day-long selling pressure. Many believe the stock market is more vulnerable now and it is not clear how the authorities will move to protect it from further plunge.
