Bangladesh investors rioted on the streets of Dhaka after regulators halted trading on the country’s stock exchanges after only five minutes following the start of the trading day.
The benchmark index plunged almost 600 points, or about 8.5 percent, prompting circuit breakers to halt trading. This represented the fourth time in the past few weeks that trading on bangle exchanges was halted.
The market has dropped 750 points over the past five days.
The circuit breaker had been introduced to the exchanged just yesterday following an emergency meeting between finance minister, Ama Muhith and officials of the Securities and Exchange Commission and central bank.
A similar fall on the markets on Wednesday also led to an automatic trading halt.
The recurring problems in the Dhaka exchanges underlie the high risk and volatility in the developing markets.
For example, street riots erupted on the streets on January 10 when a 9 percent drop in the market triggered a halt in trading. However, on the following day, markets surged more than 15 percent – before again sliding the past few days.
Since early December, the overall trend has been decidedly downward – the Dhaka Index has plunged almost 30 percent from the all-time highs it reached on December 5.
The surging Bangladesh market brought in millions of small-time traders last year. However, as big institutions and banks have started to scale back their exposure to equities, retail traders have begun to panic, leading to frequent volatile spikes in the market.