January 20, 2011 / 1:21 PM / 9 years ago

Police fire tear gas after Dhaka trading halted again

DHAKA (Reuters) - Police used batons and fired tear gas to break up violent protests by hundreds of Bangladeshi stock investors on Thursday after prices collapsed again, halting trading for a fourth day this month.

Investors demonstrate as they block roads in front of the Dhaka stock exchange in Dhaka January 20, 2011. REUTERS/Andrew Biraj

The Dhaka Stock Exchange’s general index fell by 8.5 percent or 587 points in just five minutes after trading started at 7:00 British time, breaking the regulator’s limit of 225 points.

That limit was imposed on Wednesday, another official measure aimed at calming a market that has been volatile for weeks.

The Dhaka and Chittagong markets will be closed on Sunday January 23, the first working day after the two-day weekend in mainly Muslim Bangladesh, the stock market regulator said later on Thursday.

The regulator also suspended activities of six brokerage houses for 30 days due to aggressive selling.

“We smell foul play to destroy the stock market and push us into hunger,” shouted an angry investor, while others called for the resignation of the finance minister, the head of the stock exchange, and the central bank governor, witnesses said.

Protesters blocked roads around the stock exchange building and fought running battles with police.

“I have become a pauper again,” a sobbing young shareholder said.

Protestors also took to the streets in other towns on Thursday.

“Consecutive slides over the weeks made general investors nervous and triggered panic selling while financial institutions remained inactive,” a stockbroker said.

Many investors in the Dhaka and Chittagong exchanges are individuals who have taken out large loans. The number of individual investors has risen to more than 3 million from fewer than 500,000 in 2006.

Share prices nearly doubled in 2010, encouraging new investors into the market, but banks and other financial institutions, some of which had invested 75 percent of their deposits in the stock market, have largely stopped making new investments. This has caused fear among small investors.

The benchmark Dhaka index has lost more than 29 percent since December 5, when it hit a high at 8,918.51 points.

Reporting by Ruma Paul; Editing by Anis Ahmed and Daniel Magnowski

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