Hundreds of investors went on the rampage in the commercial heart of the Bangladeshi capital Dhaka on Sunday after the stock exchange suffered its steepest ever fall. The benchmark DSE general index (DGEN) lost 552 points or 6.72 percent by the close of trade as panic gripped investors following last week's policy rate hike by the central bank and a series of recent volatile market swings.
Local police chief Tofazzal Hossain said at least 500 investors hurled bricks at law enforcement officers near the Dhaka Stock Exchange and the Securities and Exchange Commission (SEC) offices.
"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 plunge pulled the DGEN down to 7,654.40. The index hit a record high on December 5 of 8,918.51 points, up around 80 percent since the start of the year.
On December 8, the market also nose-dived, prompting protests by at least 2,000 investors in Dhaka and several other district towns.
Dealers said the central bank's move to contain inflation hit the market at a time when investors were already rattled by instability.
The Bangladesh Bank raised the cash reserve requirement (CRR) in commercial banks by 50 basis points to six percent, sending financial institutions scrambling for funds.
"The CRR has created a liquidity crunch in the market and forced some banks to sell their stocks to meet the reserve requirement," said Arif Khan, head of IDLC Securities, a merchant bank. "In addition, the retail investors have been panicky."
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