Analysts held the central bank's lack of control for the stock market's crash.

The Dhaka Stock Exchange fell by 555 points during the first week's trade in the year. But on Sunday the stocks came tumbling down with a record fall of 600 points, which is 7.75 percent.

The analysts indicated that the Bangladesh Bank should have contained the exposure of commercial banks in the stock market.

"This fall was imminent," said Zaid Bakht, research director of Bangladesh Institute of Development Studies.

According to him excess liquidity in the market coupled with the 'over exposure' of banks in the market compounded the problem making it overheated.

"And now there is a credit crunch in the market as the central bank has asked banks to limit their stock investment."

The central bank should have acted when the banks started to pour their funds into the market, said Bakht.

"Where were they (central bank) when the banks were investing heavily?"

Former DSE chief executive Salahuddin Ahmed echoed him.

"They [banks] had forgotten their responsibilities," he told bdnews24.com on Sunday.

It would have been effective if it was controlled beforehand, according to Ahmed, a finance professor of Dhaka University.

Regarding the crash, he said that it shouldn't have happened because all the sectors are not overpriced.

"I would say it's an abrupt correction."

He was echoed by a former chairman of the capital market regulator Securities and Exchange Commission, A B Mirza Azizul Islam.

"The fall is normal, but the extent in a single day is quite unnatural," he said while speaking to bdnews24.com on Sunday.

Also a former caretaker government adviser for finance and commerce, Islam, however, said that the index was still rather high.

"An index between 6000 and 6500 is reasonable."

Source: bdnews24.com/Bangladesh/ Jan-09-2011