Bangladesh Plunge Protection Team Ramps Stocks 15% After Major Crash

Bangladesh shares rose sharply in early trading today, 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 yesterday 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. 

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