Four listed SMEs get lukewarm responses from investors

Four small and medium enterprises (SMEs) shifted from the OTC market to the SME platform four months back failed to attract investors as they have been struggling to improve their financial performances.

The companies are Apex Weaving and Finishing Mills Ltd, Wonderland Toys Ltd, Himadri Ltd and Bengal Biscuits Ltd.

The companies’ financial health looked poor after their listing with the SME platform, which could be the reason behind the dull trade of their shares, analysts say.

Investors initially showed some interest in the companies but as the days passed, their share prices continued to decline.

Unlike the main trading boards, the SME platform is dedicated to eligible institutional investors and individuals having at least Tk 1 crore invested in the secondary stock market.

Retail investors are not allowed to buy shares in the SME platform as the market tends to be more volatile because of the price volatility.

The four companies failed to file their financial statements regularly after listing with the SME platform.

On September 30, 2021, the Dhaka Stock Exchange had launched the operation of its SME platform with the first listing of six companies, including the four companies. The two companies Master Feed Agrotec Limited and Oryza Agro Industries entered the SME platform after floating Initial Public Offerings (IPO). Later, three more companies—Nialco Alloys, Krishibid Feed and Mostaf Metal Industry --joined the SME platform.

“The companies transferred to SME board from the OTC market disclosed no financial statements. As a result, institutional investors showed no interest to bet on the stocks,” said capital market analyst Abu Ahmed.

“Most of the companies shifted to the SME platform from the OTC market are family-owned and weak companies. The corporate governance of those companies was not up to the mark,” he said.

The new companies with potential should be listed with the SME board, he suggested.

On the debut day, Bengal Biscuits’ share prices rose to Tk 213.30 from Tk 180. In four months, it dropped to Tk 104 on Sunday, down 42 per cent from the debut price.

Wonderland Toys’ share price fell 19.88 per cent to Tk 19.90 from the debut price of Tk 16.60 on the SME platform. In four months, it declined to Tk 14 on Sunday, down 15.66 per cent from the debut price.

Himadri’s share price rose 20 per cent to Tk 9.60 from Tk 8 during the period. In four months, it has increased to Tk 13.80, up 42.02 per cent from the debut price.

During the period, Apex Weaving’s share price was up Tk 14.40 from Tk 12. In four months, it fell to Tk 6 on Sunday, down 45.83 per cent from the debut price.