Home ›› 14 Sep 2022 ›› Stock
Shares of eight companies on the Dhaka Stock Exchange (DSE) jumped abnormally in the past nine trading sessions although they had neither any positive business outlooks nor growth in earnings.
All the companies claimed they had no undisclosed price-sensitive information that could fuel an unusual surge in their share prices as well as trading volumes.
Even after the authorities of the Dhaka bourse served them show-cause notices asking about why their share prices were going up abnormally, unusual price surges of these stocks still continued at a significantly accelerated rate.
Market insiders and experts, however, said the show-cause notice that the DSE usually serves to companies in response to unusual hike in share prices, is just an action on paper with no effect.
In these cases, the stock exchange cannot take any further action but serving the show-cause notice only, they commented.
The securities regulator, the Bangladesh Securities and Exchange Commission (BSEC), also remains silent regarding such issues, they said.
Experts fear if the trend continues in a full sway, it would pose a threat to the stability of the country’s capital market.
Due to such unusual share price hikes, the general investors suffer the most as they bet on the skyrocketing stocks, despite warnings from regulators and financial experts not to pour funds into the capital market without proper knowledge
and information.
Following the recent stock price surges of these 8 companies, the DSE as usual had served them each a show-cause notice asking them to explain the actual reasons behind the scene.
The all companies, however, in a knee-jerk response, just informed the bourse in the same manner that there was no undisclosed price-sensitive information behind the unusual price hikes of their stocks.
According to an analysis carried by The Business Post, JMI Hospital Requisite Manufacturing’s share price increased by 24 per cent from this September 1 to September 13, raising the per share price to Tk105.1 from Tk84.7.
During that time, Sonali Aansh Industries’ share price rose by 27.7 per cent to Tk651.6, while Kohinoor Chemicals Company (Bangladesh) Limited’s share price jumped 63 per cent to Tk712.8 per share.
In the same period, Fine Foods’ share price surged by 9.9 per cent to Tk57.9, while Orion Pharma’s price went up by 12.5 per cent to Tk117.9 per share.
Similarly, Sea Pearl Beach Resort and Spa Limited’ share price jumped 29.9 per cent to Tk76.2 each in the current month, according to DSE data.
During the time, the share price of Gemini Sea Food shot up by 15 per cent, from Tk392.8 to Tk451.5 each share.
In the first week of the ongoing month, Sinobangla Industries’ share price jumped by 10.3 per cent to Tk 74.8.
Regarding this, M Saifur Rahman Mazumdar, chief operating officer and spokesperson of the DSE, told The Business Post, “The show-cause notice is the initial step. To protect the interests of the general investors, we also conduct further investigation when any company’s share price goes up abnormally.”
“The DSE’s regulatory department is also working with the BSEC to find out whether any market manipulation plays role behind the unusual share price surge of any company,” he added.
AB Mirza Azizul Islam, former finance adviser to the caretaker government, told The Business Post, “Such unusual price surge of some securities is not a positive sign for the capital market. Those who trade largely these over-priced shares should be taken under scanner.”
“The BSEC has always been working to stop any irregularities with the capital market and protect the investors’ interests. We firmly believe, we will be able to identify the players involved in any manipulation and take actions accordingly,” said BSEC spokesperson Mohammad Rezaul Karim.
