Posted on 08 November 2011. Tags: chittagong stock exchange
The Chittagong Stock Exchange is the second largest market in Bangladesh. Within the country, only the Dhaka Stock Exchange is larger. The CSE was founded in October of 1995 after permission was granted from Bangladesh’s Securities and Exchange Commission. Since its inception, the exchange has grown to include dozens of listed companies ranging from AB Bank Limited to Uttara Finance and Investment, LTD. Unfortunately, controversy has erupted within the last year involving both the Chittagong Stock Exchange as well as the Dhaka Stock Exchange.
It is no secret that the world is currently in a state of financial turmoil. Though western markets and economies started to collapse in 2008, the Bangladesh markets crashed in late 2010. The CSE had been known for its bullish market behavior up until the final months of 2010, but its reputation suddenly turned bearish thanks to what has become known as the 2011 Bangladesh share market scam. Due to the crash caused by this scam, the Chittagong Stock Exchange lost 1,800 points between December of 2010 and January of 2011. Financial experts believe that the crash was artificially engineered in order to benefit a small number of investors at the expense of the majority of market players. Massive protests began to take shape, and the government was pressured into investigating potential wrongdoing.
A probe was launched in early 2011 by the government of Bangladesh, and its findings were published in April. The findings of the probe revealed that the crash was caused by the dishonest dealings of approximately 60 nefarious individuals. The published report from the probe contained a number of recommendations including a complete overhaul of the Securities and Exchange Commission.
At this time, none of the report’s recommendations has been implemented. However, serious changes must be made if the markets are to recover. Because of the current uncertainty surrounding the Bangladesh markets, it is not advised to invest in the Chittagong Stock Exchange until major adjustments are finally implemented.
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