A Study on Recent Stock Market Crash in Bangladesh.
Introduction:
Currently share market is well known to all. It is known that the economic stability and prosperity of a country depend on the condition of her share market. Many brokerage houses are now operating in our country to help investors. When Bangladesh economy looks like a good shape based on capital/share market, that time Trading on the Dhaka Stock Exchange index was halted after it fell by 660 points, or 9.25%, in less than an hour. Chittagong Stock Market also met a similar fate. An abrupt crash of the market sparked violent protests from the Bangladeshi investors. It was the biggest one-day fall in its 55-year history. It is estimated that over three million people - many of them small-scale individual investors - have lost money because of the plunging share prices. The benchmark index had climbed by 80% in 2010 but has lost more than 27% since early December. As a result Investment in the share market is a popular business among the educated middle class of Bangladesh who were left frustrated with the sudden loss to their capital. They were finding ways and means to exit from the market in order to minimize the losses Why this is happen our question is raise, it is not expected for us miracle index up and suddenly down. The experts give their comment that the immediate reason for this crash was the policy of the regulators of the market who laid down a limit for investment by the banks and other financial institutions in the stocks. This was done in order to avoid the market being overvalued. As the banks and other big investor institutions withdrew the capital from the market, the panic ensued.
Objective: 1. Findings Regarding Possible Reasons for Stock Market Crash. 2. Remedies/Recommendations to Avoid Stock Market Crash in Future.
Findings Regarding Possible Reasons of Stock Market Crash
Bangladesh suffered a big bang crash in stock market last three months which results in many investors’ loss and especially trust of the small investors
Currently share market is well known to all. It is known that the economic stability and prosperity of a country depend on the condition of her share market. Many brokerage houses are now operating in our country to help investors. When Bangladesh economy looks like a good shape based on capital/share market, that time Trading on the Dhaka Stock Exchange index was halted after it fell by 660 points, or 9.25%, in less than an hour. Chittagong Stock Market also met a similar fate. An abrupt crash of the market sparked violent protests from the Bangladeshi investors. It was the biggest one-day fall in its 55-year history. It is estimated that over three million people - many of them small-scale individual investors - have lost money because of the plunging share prices. The benchmark index had climbed by 80% in 2010 but has lost more than 27% since early December. As a result Investment in the share market is a popular business among the educated middle class of Bangladesh who were left frustrated with the sudden loss to their capital. They were finding ways and means to exit from the market in order to minimize the losses Why this is happen our question is raise, it is not expected for us miracle index up and suddenly down. The experts give their comment that the immediate reason for this crash was the policy of the regulators of the market who laid down a limit for investment by the banks and other financial institutions in the stocks. This was done in order to avoid the market being overvalued. As the banks and other big investor institutions withdrew the capital from the market, the panic ensued.
Objective: 1. Findings Regarding Possible Reasons for Stock Market Crash. 2. Remedies/Recommendations to Avoid Stock Market Crash in Future.
Findings Regarding Possible Reasons of Stock Market Crash
Bangladesh suffered a big bang crash in stock market last three months which results in many investors’ loss and especially trust of the small investors
References: Hossain M.(2011), “Recent Stock Market crash and role of Monetary policy”, Bangladesh Institution of Development Studies (BIDS) Matin T. A (2011), “Money supply and yield seeking behavior”, Brac EPL, stock brokerage limited Debnath C. N. (2011), “Putting capital market on right track” The Daily Star [pic]