Wednesday, April 20, 2005

The small investor screams as prices go down!

A group of vociferous small investors protested at the decline in the Dhaka Stock Exchange. They have seen a drop of about 15% in the value of their portfolio. Part of the reason is that lots of shares were purchased before companies declared dividends. Now that they have collected their dividends, those same "investors" have sold off the shares.
The DSE stock market casino is reputedly rigged by a select group of traders, manipulating prices and creating artificial booms. It has very little to do with good solid companies raising finance for capital investment to expand capacity and create jobs. Ignorance and greed prevail. We have not reached the mania of 1996 when the index reached 4,000. We are now at 1,750, having jumped from 1100 in less than twelve months.
Nevertheless, a significant number of savers in old Dhaka are going to be mightily disappointed. They will have to grin and bear it. Similar protests have occured in the Karachi Stock exchange, where there has been a much bigger boom and drop.
As they say, "only for the brave. Not for widows and orphans".

2 Comments:

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12:24 am  

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