DHAKA: Bangladesh on Monday reversed a decision to offload shares in dozens of state-owned enterprises, while angry investors took to the streets again in response to a continuing stock market tumble.
The government's decision to offload shares in 26 state-owned companies had led the stock market to panic further, a stock market official said.
The benchmark Dhaka index has lost more than 37 percent since Dec. 5, when it hit a record high after the central bank raised banks' reserve requirements ratios to curb runaway credit, especially to the volatile capital market.
Investors were on the rampage outside the Dhaka stock exchange on Monday again as the benchmark index shed 7.8 percent, the steepest fall since Jan. 10, following a 7.27 percent slide on Sunday.
Police used batons and teargas to break up disgruntled investors who pelted them with bricks, tried to set fire to a building and vandalised vehicles.
Analysts said the government should offload their shares last year when demand far outstripped supply.
One stockbroker said a severe lack of confidence due to the fall in prices had led to panic selling by retail investors and even by some financial institutions, while banks and other institutions had remained inactive amid liquidity shortage in the money market.
Banks, some of which had invested 75 percent of their deposits in the stock market against a cap of 10 percent in 2010, recently held back on further investment.
Prime Minister Sheikh Hasina last week asked the relevant authorities to take immediate steps to stabilise markets, with about 3.3 million people, mostly small-time investors new to stock trading, relying on it to supplement meagre incomes.
Share prices nearly doubled in 2010, encouraging new investors to enter the markets, but persistent declines since late last year triggered a series of violent protests.
A government-appointed committee is investigating the collapses in share prices and will submit its report within two months.
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