Bangladesh’s stock frenzy raises fear of new crash

Standing left to right – Mr. Dinesh Jebamani (Chief Manager Liability Product Management and New Age Media – Seylan Bank), Mr.Sudesh Peiris (Senior Manager – Digital Banking Channels – Seylan Bank), Ms. S.Senevirathne (Representative of the Revenue Department – Western Province), Mr. Tilan Wijeyesekera (Deputy General Manager – Retail Banking – Seylan Bank) and Mr. Malik Wickremanayaka (Deputy General Manager – Operations – Seylan Bank)

DHAKA, February 21, 2010 (AFP) – In a run-down office in downtown Dhaka, excited investor Mizanur Rahman has just spent his life savings of 3,000 dollars on shares despite knowing nothing about market fundamentals. Everyone in this unofficial trading room, one of hundreds across the country, is glued to a screen showing share price movements on the Dhaka Stock Exchange — up nearly 30 percent since January.

“My friends make hefty profits investing in stocks and told me I could make 20,000 per month by investing 200,000 taka (3,000 dollars),” said Rahman, a 30-year-old electrician who returned from working in Singapore last week.

“Some people have said the market could crash any time, but I’ve been hearing about this for years. In reality, it’s going up and up,” he said.

Rahman is one of 143,000 people who opened electronic share accounts country-wide in the first two weeks of February. The figure has officials predicting this month will break the previous record, set in October 2007, of 191,000 new accounts.

But like the majority of Bangladesh’s new part-time traders, Rahman has no idea what the bourse’s largest listing or best performers are, what the quarterly or annual profits of key firms are