2011 Bangladesh share market scam

The 2010-11 Bangladesh share market scam was a period of instability from 2009 t0 2010; the turmoil was in the two Bangladeshi stock exchanges, and . The market went up 62% in 2009, and 83% in 2010, but then went down 10% in January 2011, and a further 30% in February 2011. The crash is deemed to be a scam and exacerbated due to government failure.

The stock market was in turbulence throughout much of 2009, with the long bullish trend starting to turn grim. The bullish trend was initiated by the end of the two-year political crisis and re-emergence of democracy when Awami League won the December 2008 polls, and was largely unaffected by the BDR Mutiny. The market was heavily aided by the entrance of Grameenphone into the capital market, when the index rose by 22% over a single day on 16 November 2009. Share prices continued to fluctuate, reaching the annual high in mid-2009 before plummeting by the end of 2009, with retail investors threatening a hunger strike. Notable that, Bangladesh also faced such a stock market crash in 1996. Coincidentally, Awami League have been at government during both of the crashes.

The market continued to be turbulent throughout 2010, with the DSE hitting its all-time high revenue and the largest fall in a single day since the 1996 market crash, within the space of a month.

By the end of 2010, it was well known that the capital markets of Bangladesh well overvalued and overheated. The central bank had taken measures to cool the market down and control inflation by putting a leash on the liquidity.

The conservative monetary measures adversely effected the capital market, with the market falling once on 13 December by 285 points, over 3% of the DGEN Index which stood at around 8,500 points. The capital markets suffered a second fall on 19 December, with the index falling a further 551 points, or about 7%. This 7% fall in the 's index on a single day was the largest fall in the 55-year history of the Exchange, surpassing the fall of the 1996 market crash. This fall was deemed 'normal' by analysts, who believed the market was overvalued.

Investors took to the streets with protests. Random objects like wood and papers were set on fire in front of the DSE office in Motijheel

Immediate measures were taken by the regulatory body the Bangladesh Securities and Exchange Commission, which, together with the Bangladesh Bank, laxed its earlier conservative measures to pacify the fall. As a result, the market ameliorated the next day by 1.9%.

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Wikipedia