Bangladesh orders probe into market slump

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

DHAKA, January 24, 2011 (AFP) – Bangladesh has ordered a probe into the slump on the Dhaka Stock Exchange and unveiled a series of reforms to restore confidence in the market.

The move follows the index’s 30-percent fall since it hit a historic high of 8,918.51 on December 5, with the crisis being blamed on overheated valuations and poor regulation.

The huge falls triggered violent protests by small investors, many of whom have lost savings, and prompting the government to admit regulators had made mistakes in handling the issue.

Finance minister A.M.A Muhith told a crowded news conference Sunday night that trading, suspended since Thursday, would resume on Tuesday.

He added that a new circuit breaker that automatically halts trading and has been blamed by some experts for triggering panic among investors, would no longer be used.

“A high-powered committee will be formed in 15 days to investigate the stock market crash. We can find out what actually happened because now we have all the data and information about day-to-day trading,” he said.

The minister said the government decided to make changes to the functioning and regulation of the index

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