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27 February 2024

Bangladesh stocks lose 7.0% amid double-digit crash


Bangladesh's main stock index plunged nearly 7.0 percent on Monday, deepening a crash that has seen its value tumble by about 30 percent since the start of the year.

The benchmark DGEN index, which analysts have long-warned was hovering at unsustainable levels, lost 260.43 points or 6.77 percent to 3,585.22 points in afternoon trade.

"It's nothing but panic. What's happening is an overreaction," former head of the Securities and Exchange Commission (SEC) Faruq Ahmed Chowdhury told AFP.

"Investors' confidence has been shattered by conflicting signals from the regulator and the government, the recent announcement of a tight monetary policy and the lowering of growth estimates," he said.

A government order last month reportedly announced that the authorities would enforce a ban on the country's million-plus civil servants and armed forces from investing in shares. The SEC later said no such order was issued.

The government's revenue board meanwhile reversed its decision to allow illegally earned money from being invested in the market.

On January 26, the central bank tightened monetary policy to rein in double-digit inflation, and also cut its projection for Bangladesh's annual growth to around 6.5 percent from 7.0 percent in the year to June.

Last year, the benchmark index fell 37 percent, its worst annual performance since 1997 when it lost 67 percent.