Now this can’t be right. While trying to downplay the day’s ongoing protests, Prime Minister Sheikh Hasina blamed the opposition BNP for the skyrocketing price of food and for the stock price scandal overwhelming the Dhaka Stock Exchange.
According to a Daily Star report, she said:
“The BNP has created issues for calling hartal by tricking in the share market and hoarding essential commodities resulting in price spiral which adversely affected the lower-income groups,”
This is nonsense. The domestic price of staple foods couldn’t have been pushed by the oppositional rhetoric that is the mainstay of Bangladeshi politics. The domestic market always takes into account the noxious political bluster that surrounds the two main political parties; the current price always reflects the current political situation. Also no amount of hoarding can affect the future price of a commodity; the issue is here of long-term sustainable production. Bangladeshi farmers simply seem unable to produce enough grain for the domestic market- a future event that has repercussions on current prices.
Indeed there is also that inconvenient fact that no amount of hedging or “tricking in the share market” can trigger the kind of collapse that the DSE has been experiencing recently. The stock market plunge was likely created over years of incorrect share price “fixing.” Now that institutional investors have judged that they bought shares at an artificially high prices and have begun to sell off their assets, the moved observed on the trading flood is causing a panic in the markets. Panic selling is creating a downward pressure on prices, reinforcing the rationale behind the sell-off. One political party or another couldn’t have determined the wide-nested incentive effects that likely caused weak firms to “report” rather more impressive earnings and that then caused major firms to sell those shares at lower, “corrected prices”.
The Prime Minister’s criticism and comments are nothing but political jabs meant to take down an opponent who is showing greater skill in maneuvering around the political fighting ring.
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