The stock market is running like a mad horse crossing DSE price index 7,075 point that never happened before. It is warming up every day with a buying spree dominated by big company shares. We are afraid the situation may increasingly become too risky and it is time the market regulators must find out whether or not market manipulators are at work to rob small investors in the end. On Monday the DS-30, the blue-chip index also, gained 12 points to hit 2,546 benchmark points. These are the highest levels the market reached since 2013. It appears that general investors are buying shares lured by high profitability but institutional investors are almost on the sidelines. The market has entered a very risky territory down from around 4000 DSE price index early this year. We would say investors need to be careful and regulators must be on guard to keep the situation under firm control.
Today’s situation is reminiscent of the 1996 and 2010 stocks collapses. Market bubble ups made general investors crazy as share prices jumped to finally get the market crashed. Subsequently it appeared that powerful traders and big company shareholders had sold their entire stocks under the cover of the market bubble up. General investors who bought these shares lost their capital overnight to become paupers, many even committed suicide. We are alarmed by the disclosure that a part of the government stimulus package is going to the stock market breaking rules. Banks have also invested from special funds in stocks, not allowed otherwise, adding to the risks.
We are appalled to see that most masterminds of the past two market crashes are now important government leaders while their stock market involvement continues. The terrible past experience now rings the bell of caution again. We know that most stock market debacles in the past occurred having been patronized by people in the market regulatory body and powerful market insiders. This time the Bangladesh Security and Exchange Commission (BSEC) has been reconstituted and important reforms also carried out to tame the undue control over the market. But looking at the political influence over the regulators and the market the vulnerability for another market crash may not be ruled out. We would ask general investors to be watchful and regulators to tighten control.