The Dhaka Stock Exchange (DSE) has expressed concerns over the abnormal increase in share prices, in less than a month, of two companies listed in the capital market – Taufika Foods and Lovello Ice-cream PLC, and Esquire Knit Composite PLC.
Taufika Foods and Lovello Ice-cream PLC
Share prices of Taufika Foods and Lovello Ice-cream PLC rose by about 75 per cent in the last 20 working days. On January 29 this year, the company's price per share was Tk 29.8. From there, its share price gradually increased to Tk 51.9 until February 18.
The DSE wrote to the company in this regard on February 20, asking why the share price was increasing abnormally. After that the share price started to fall. As a result, the share price of the company came down to Tk 27.02 in the last five working days.
Taufika Foods and Agro Industries Ltd have been engaged in the business of manufacturing and distribution of ice cream since 2016 under the brand name Lovello. Lovello Ice- Cream is produced from imported, high-quality raw materials using state-of-the-art technology.
This firm raised Tk 30 crore through an initial public offering (IPO) to expand its business in 2021. Upon the approval of the Bangladesh Securities and Exchange Commission (BSEC), the company started its share trading on the DSE and CSE on February 10, 2021.
The company paid out a 10 per cent cash dividend to its shareholders for 2023 and a 12 per cent cash dividend for 2022.
Its sponsors and directors held a 44.65 per cent stake in the company, while institutions owned 21.36 per cent and the general public 33.99 per cent until January this year.
Esquire Knit Composite PLC
Share price of Esquire Knit Composite PLC, another company listed in the capital market, rose by 22.19 per cent in three working days. On February 18, the company's price per share was Tk 23.5. From there, the price rose to Tk 31.1 on February 22.
The DSE sent a letter to the company on February 25 to inquire about the reason for the increase in share price. The share price did not rise after issuance of the letter. As a result, on February 25 and 27, the company's share price was traded down to Tk 27.02.
Esquire Knit Composite Ltd (EKCL) board of directors recently decided to issue preference shares in a bid to finance expansion projects and machinery procurement.
The company planned to raise a fund worth Tk 100 crore by issuing 10 crore preference shares at Tk 10 each, according to a DSE filing.
Out of the funds to be raised, the company would spend Tk 65 crore to finance its expansion projects and machinery procurement, while the remaining Tk 35 crore would be utilized to repay bank borrowings.
As the reason for the increase in share price, both companies said in the DSE inquiry that there is no undisclosed price-sensitive information about the company for the recent unusual price hike and increase in volume of shares.
