In a repeat of a similar scenario from last month, thousands of Bangladeshi investors rioted on the streets of Dhaka, angry after incurring huge losses on the stock market.
The Dhaka Stock Exchange was halted after falling by 9.25 percent in less than an hour – the largest one-day decline in its history. That followed a 6.7 percent drop in Sunday trading.
While the Dhaka benchmark index surged about 80 percent in calendar 2010, it has plunged 27 percent since early December.
The Bangladesh government regulator, the Securities and Exchange Commission, met on Monday with bankers and institutional stockbrokers to discuss how to prevent the market from incurring additional sharp losses.
Protests have also spread to the coastal city of Chittagong which has its own stock exchange.
Rumors have abounded that large institutional investors have abandoned the market after recording big gains, prompting other investors to exit equities. The pull-out was also precipitated by regulators’ decision to limit the percentage of deposits that banks may invest in the equity markets.
However, on Sunday morning regulators raised the bank loan ceiling of 100 million taka (about $1.43 million) for investing in the stock market and removed many other restrictions.
Many small investors believe the hard market declines are the result of manipulation by the government and large investors.
The government will certainly look into if there is any manipulation, said Bangladesh Finance Minister Ama Muhith.