Bangladesh stocks rise 15 pct after unrest

The Dhaka Stock Exchange's benchmark General Index rose 15 percent, with 226 shares rising and only three declining in early trade.

Bangladesh stocks rise 15 pct after unrest

Bangladesh shares rose sharply in early trading on Tuesday, a day after a steep plunge forced the bourse to suspend trading and sparked violent street protests by angry investors which were broken up by the police.

The Dhaka Stock Exchange's benchmark General Index rose 15 percent, with 226 shares rising and only three declining in early trade. The bourse suffered its biggest crash ever on Monday which led authorities to suspend trading after 50 minutes in response to a 8.9 percent decline.

Shares, battered for weeks, had sunk 6.7 percent on Sunday.

"We are seeing peaceful, normal business conditions back at the bourse with many shares traded in the first hour after trading opened," one investor said.

Analysts said investors had been encouraged by measures taken by the Securities and Exchange Commission, the market regulator, to relax the limit on how much buyers can borrow from their brokers to invest.

Sentiment was also boosted by the central bank's extension of a deadline for banks to adjust the vast amounts of loans that had been diverted from the industrial sector to capital markets.

"All these decisions have encouraged investors to inject funds into the market and that helped the rise in the market today," said Mostaque Ahmed Sadeque of Investment Promotion Services Limited.

Many investors in the Bangladesh's Dhaka and Chittagong exchanges are individuals with modest means who have taken out large loans to invest in shares to improve living standards.

Individual investors numbered fewer than 500,000 in 2006, with the number since rising to more than 3 million.

"The income from share trading helped to run my family, send my children to schools and meet other requirements," Raqibul Haque, a small investor who funded stock purchases by selling his wife's jewellery, told Reuters.

"But I felt so helpless as prices fell sharply over the past weeks."

Police said they expected no recurrence of Monday's turmoil, when thousands of investors vandalised cars and blocked roads around the exchange, before police fired tear gas and used water cannon to disper them. There were also protests in Chittagong and other major towns.

Prices of shares nearly doubled in 2010, encouraging a stream of new investors to enter the stock market.

Persistent declines since early last month unleashed a series of street protests, prompting the stock market regulator and the central bank to take measures to cool the market.

The benchmark Dhaka Stock Exchange index has lost more than 27 percent since Dec. 5.

The market, which surged by more than 80 percent in 2010, lost its value by $9 billion in the trading week of Jan 2-10, the SEC said. Market capitalisation was $41 billion on Monday. ($1 = 71 taka)


Last Mod: 11 Ocak 2011, 11:12
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