Sunday, December 19, 2010

Riot of the Day: Stock Market Investors in Bangladesh

The Bangladesh stock market index declined on Sunday by 552 points or 6.72%. The result: Bangladesh investors rioted.

Earlier in the month, on December 5, the index hit a record high, having climbed 80% since the start of the year.

At least 500 investors hurled bricks at law enforcement officers near the Dhaka Stock Exchange and the Bangladesh Securities and Exchange Commission offices, said local police chief Tofazzal Hossain according to AFP news agency.

"They chanted slogans against the government and the regulators, and marched through the busy roads in the Motijheel Commercial area, halting traffic. They also staged a sit-in at the SEC building," he said.

The decline came after (surprise, surprise) indications of a tighter central bank monetary policy. The bank had just raised interest rates.

As a result of the protest, however, regulators have now agreed to relax some of the conditions that they expect will increase the money supply and "stabilise" the market.

The rising value of the stocks in recent years has attracted hundreds of thousands of small-scale or retail investors in Bangladesh, says the BBC's Anbarasan Ethirajan.

Bottom line: The money printing in Bangladesh might make Ben Bernanke look like a sound money man.

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