Stock exchange leaders warn of disaster

Leaders of the country's two bourses warned of dire consequences in the wake of an "overheated market".

"Investors should invest at their own risk in this overheated market," Shakil Rizvi, president of Dhaka Stock Exchange said Saturday.

Over the last two weeks the Dhaka stocks' key market index rose 500 points, setting new records. The daily transaction, over the same period, peaked to Tk 28 billion, surpassing the previous high of Tk 24 billion.

Share prices are continuously rising for the last two weeks and there is no indication that it will cool down soon, according to Rizvi.

"If this goes on then the market will surely face disaster."

Meanwhile, Chittagong Stock Exchange president Fakhor Uddin Ali Ahmed urged investors to stop pouring funds in this 'over-heated' market.

"Investors will burn their fingers if they invest now."

The bourses jointly organised a press meet on Saturday at a city hotel.

Both the presidents urged the government to strengthen the regulator.

"The Securities and Exchange Commission needs to be strengthened so that it can protect the investor by strict monitoring and surveillance activities," said the DSE president.

The capital market cannot perform well if the regulator is challenged for its decisions, he added.

President of the port city bourse urged investors not to pay heed to rumours.

"It is not the time to invest."

Ahmed suggested checking fundamentals of issues before making any investment decision.

To avoid any disaster, the stock exchange leaders recommended floating shares of state run enterprises (SOE).

"This ominous situation can be avoided by floating more issues of the SoEs that are already in the capital market," said the CSE president.

The DSE president warned the government that any delay would bring about catastrophic consequences.

"There are 2.8 million capital market investors from every corner of the country and if a slump starts then it would be hard to gain confidence for many years."

"Government should do something about the SOEs right now before it is too late," said Shakil.

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