Junk shares see price correction at DSE

The junk shares witnessed price correction at the Dhaka Stock Exchange on Sunday as nine of top 10 loser companies at the bourse were from the Z-category.

Normally, the shares of ‘Z’ category companies are considered as junk shares as they do not regularly provide dividends and hold AGMs.

Two of the top loser companies – Mithun Knitting and Shyampur Sugar Mills – saw 10 per cent price corrections.

Mithun Kintting’s share price, which was Tk 22 on the previous session, came down to Tk 19.8 on Sunday.

The ‘Z’ category company’s operation has been suspended since September 20, 2019.

The company was followed by Shyampur Sugar Mills. Its share price declined from Tk 123 to Tk 110.70 on Sunday.

It has been out of production since December last and failed to gain any profit in the last five years.

The other eight top loser companies were – Beach Hatchery, Meghna Pet Industries, Alltex Industries, Safko Spinnings Mills, Savar Refractories, Meghna Condensed Milk, Fareast Finance & Investment and Paper Processing & Packaging Limited.

In the recent weeks, a significant number of ‘Z’ category companies witnessed unusual hike in their share prices at the premier bourse.

Against such a backdrop, the Bangladesh Securities and Exchange Commission (BSEC) on Thursday directed the DSE to find out reasons behind the increase in prices of companies above 40 PE ratios.

The DSE has also been asked to find out whether any company with more than 40 PE was given margin loan in violation of BSEC guidelines.