The Dhaka Stock Exchange was an unlikely bubble but its bursting is proving typically ugly.
Hundreds of investors rioted in the streets outside the Bangladeshi exchange yesterday after trading was halted when prices plunged almost 9 per cent, the bourse's biggest drop in its 55-year history.
The crowd clashed with police, lit piles of tyres and furniture and chanted slogans against the government. Television reports showed several protesters bleeding badly from blows after police said they were forced to use batons.
In Bangladesh, where the GNI per capita in 2009 was US$580 (Dh2,130), according to the World Bank, the stock exchange became a source of relative wealth in the past year as it climbed more than 80 per cent in the first 11 months compared with the same period a year before.
This success was enjoyed not only by fund managers and other professionals but by millions of "mom-and-pop" investors who poured money into the exchange. The number of investors in the market doubled to 3.3 million.
The first signs of trouble emerged last month, when the government raised interest rates on concerns that shares were overvalued. Stock prices immediately began falling.
There were protests after some of the earlier dips but the downwards trend has accelerated recently. The main index on the exchange has fallen more than 27 per cent in the past three weeks.
"We always knew any fall would be nasty - now things are getting nasty," Reaz Islam, the head of LR Global Fundin New York, told AFP. "More than 70 per cent of investors are small investors. Most invest without looking at the fundamentals of the market and these people are very emotional - they are very hurt by this."
Many investors said they were at risk of losing their life savings.
"I lost 5 million taka [Dh258,215] out of a 10m taka investment. This is insane,"said Monirul Islam, a small investor.