SME shares woo investors as regulator eases terms

The ongoing bullish trend in the country’s capital market has also put a strong impact on the share trading of the SME board’s companies.

Out of the 15 companies listed on the SME platform of the Dhaka bourse, shares of 14 companies witnessed price gains yesterday, as per the Dhaka Stock Exchange (DSE) data.

SME companies’ share prices, however, rose significantly in the past one month.

Shares of the small-cap SME scrips started to soar since April 26, after the securities regulator had slashed down the minimum investment limit for buying SME companies’ shares in the early last month.

Although the country’s main capital market has also been in a booming trend since the start of the current month, share prices of the SME firms jumped extravagantly in the period.

Except for a single company, all the remaining 14 companies listed on the DSE’s SME platform witnessed significant price gains in the past one month.

Shares of Himadri Limited recorded the highest gain of 273 per cent during this period, with the company’s shares reaching Tk 132.6 per share on Sunday from Tk 35.5 in April 26.

Even, the DSE in early May had served the company a show cause notice asking it to clarify the unusual price hike in its shares.

The company in January this year had released its financial report for the October-December quarter of the fiscal year 2022-23.

The company reported a scintillating profit rise of 104 per cent in that quarter on a year-on-year basis.

Apex Weaving and Finishing Mills Limited was the second top gainer in the last 30 days with a price jump of 75 per cent.

The company’s shares started to soar on May 15. The company’s per share price was Tk 14.8 that day, which jumped to Tk 25.9 on Sunday.

In response to a query notice sent by the DSE on May 25, the company informed that there was no undisclosed price-sensitive information behind the recent unusual price hike in its shares.

Sharif Anwar Hossain, former president of the DSE Brokerage Association of Bangladesh (DBA) said the volatile movements of SME companies’ shares do not put a much pressure on retail stock investors because small investors are not eligible to participate in share trading on this platform.

But there should have more oversight to protect those investors who transact here, he added.

To raise the investor participation on the SME board, the stock market regulator on April 4 this year had slashed the minimum investment limit for the eligible investors to Tk 20 lakh each.

It is also widely expected that the number of qualified investors willing to invest in SME companies, will increase after the end of April-June quarter.

The share price of Wonderland Toys Limited increased from Tk 27 to Tk 41.7, a 54 per cent gain, in the past one month.

Meanwhile, the share price of Bengal Biscuits Limited jumped to Tk 97.4 on Sunday from Tk 70.1 on May 10. The company registered a 39 per cent price rice in less than 20 days.

Besides, the share price of Achia Sea Foods Limited increased by 31 per cent, Star Adhesives Limited 30 per cent, Mamun Agro Products Limited 27 per cent, and Master Feed Agrotec Limited 25 per cent in the past one month.

Among the SME companies, only Yousuf Flour Mills Limited witnessed a price fall during the period.

The company’s per share price was 1854.8 on May 3, which came down to Tk 1036.8 on Sunday.

The DSE’s SME board is comprised of small-cap companies. However, a SME company will be allowed to come to the mainboard once its paid-up capital crosses Tk 30 crore mark.

In this case, the company needs to apply for the listing on the main board of the stock exchange following due formalities.

On June 10, 2021, the Chittagong Stock Exchange, the country’s second bourse, had launched the SME platform with the listing of Nialco Alloy on the platform.

In November 2018, the securities regulator BSEC, had approved the ‘Qualified Investors Offer by Small Capital Companies Rules’, which aims to allow SMEs to be listed on the bourses.