Crash feared in Bangladesh

In a run-down office in Dhaka, Mizanur Rahman has just spent his life savings of $3,000 (Dh11,019) on shares despite knowing nothing about key market fundamentals.

Everyone in this unofficial trading room, one of hundreds across the country, is glued to a screen showing share price movements on Dhaka Stock Exchange – up nearly 30 per cent since January.

"Some people have said the market could crash any time, but I've been hearing about this for years. In reality, it's going up and up," said Rahman.

He is among the 143,000 people who opened electronic share accounts in the first two weeks of February. The figure has officials predicting this month will break the previous record, set in October 2007, of 191,000 new accounts.

But like the majority of Bangladesh's new part-time traders, Rahman has no idea what the bourse's largest listing or best performers are, what the quarterly or annual profits of key firms are, or whether a stock is overpriced.

Officials say such blind enthusiasm has fuelled a dangerous up-trend at Bangladesh's main bourse. "We could see a massive correction anytime," said Anwarul Kabir Bhuiyan, the Executive Director of the Securities and Exchange Commission.

 

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