Jan 11

Bangladesh Share Market Crashes

As the chart shows above the Bangladesh share market crashed overnight recording around an 9% fall before the market closed early amid the panic. According to the BBC , after the market clsoed there were clashes in the streets from protesters opposing the closing of the market.

Since December, the Bangladesh market has collapsed almost 30%, which is probably not surprising given it climbed around 80% for 2010 calendar year. Bangladeshi regulators have been concerned about the overvalued market and these worries look to have been on the mark given the sharemarket crash and riots in the streets.

It doesn’ matter what or where or why, markets will always boom and bust; and same goes for volatility which is obviously peaking like never before in Bangladesh. I’ll finish with a digression…The Australian and major global sharemarkets are currently experiencing relatively low volatility and whilst the timing is bound to be imperfect (and has nothing to do with Bangladesh), I believe going long on volatility may be a worthy addition to the portfolio.

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