Home ›› 13 Sep 2022 ›› Stock
The share prices of companies listed on the SME platform of the country’s premier bourse Dhaka Stock Exchange (DSE), skyrocketed in the mid of this year following regulatory measures.
But, many investors are now pulling out their SME holdings as the securities regulator the Bangladesh Securities and Exchange Commission (BSEC) again brought down the given opportunity, sending the SME stocks into losing streak after July this year.
Initially after launching the SME platform on September 30, 2021, an investor with a minimum capital market investment of Tk1 crore was eligible to trade on the SME board.
Later on, the investment limit requirement was slashed twice with the latest move on February 17, 2022 to set the limit at Tk20 lakh only.
Following this move, many investors rushed to put their investments into the SME companies, a time when almost all large-cap companies suffered due to the volatility both in domestic and international markets triggered by the Russia-Ukraine war.
Following the larger investments into SME companies’ stocks, the share prices of these companies soared at a significantly accelerated pace.
But on July 28 last, the BSEC again raised the limit of the minimum investment figure for trading on the SME Board from Tk20 lakh to Tk 30 lakh.
The regulator also asked the investors to comply with the rule within October 31 next. Unless they meet the requirement, they will not be allowed to trade here after the deadline.
This is because many small and medium range investors are now pulling their investments out of the SME board.
Due to this regulatory setback, the share prices of all the listed SME companies started falling after July this year.
Among them, Mamun Agro Products Limited suffered the most, giving up share prices by 28 per cent.
The company’s share price rose from Tk28.4 to Tk36.5 from June to July. Later on, following a constant fall, the company’s per share was traded at only Tk26.4 yesterday.
According to Abu Ahmed, a capital market analyst, when the BSEC raised the investment limit to Tk30 lakh for the SME market investment, a large number of investors started offloading their investments to exit the SME stocks the key reason behind the fall in share prices of the SME companies.
Mostafa Metal Industries Limited is the second worst sufferer, with a
share price fall of 27.34 per cent in one month only.
After lowering the investment limit, the company’s share price reached the highest at Tk36.2, but it traded at Tk26 yesterday.
The company’s share transactions also decreased significantly. In the last month, a maximum of 1.30 lakh units of share of the company were traded in a day. But only 17 thousand units of shares of the company were traded yesterday.
Oryza Agro Industries, another listed SME company, witnessed a 43 per cent increase in its share price in June-July this year. During that time, its share price rose from Tk23 to Tk34.
Later on, its share price started to decline, with the latest trading at Tk25.5 yesterday.
After raising the minimum investment limit, Achia Sea Foods Limited’s share price fell by 23 per cent with a decrease from Tk49.6 to Tk38.
Apex Weaving and Finishing Mills and the Master Feed Agrotec registered alike 22 per cent fall in their share prices.
Share prices of Krishibid Seed Limited fell by 18 percent after July.
Over the past month, BD Paints, Krishibid Feed, Nialco Alloys, Star Adhesives, and Bengal Biscuits’ share prices shed share prices by 17 per cent, 13 per cent, 12 per cent, 8 per cent, and 5 per cent respectively.
The SME stocks received a dismal response from the investors since its inception September 30, 2021.
