Debutant Khan Brothers’ price rises by 680pc
The share price of debutant Khan Brothers PP Woven Bag Industries skyrocketed by 680 per cent on Tuesday intensifying the suspicion of ‘heavy manipulation’ of share prices of newly-listed companies in last few months amid lack of effective regulatory intervention, said investors and experts. Shares of Khan Brothers with an issue price of Tk 10 each hit Tk 80 on the Dhaka Stock Exchange on Tuesday before closing at Tk 76.6.
As per the July-September quarterly report, profit after tax and earning per share of Khan Brothers declined to Tk 2.18 crore and Tk 0.50 respectively during the July-September period against Tk 2.41 crore and Tk 0.55 in the same period of the previous year.
Considering the post-initial public offering of 6.35 crore shares of the company, earning per share stands at Tk 0.34 based on its first quarterly earning of Tk 2.18 crore.
Experts said due to small paid-up capital of the newly-listed companies, in most of the cases, it became easy for manipulators to gamble with a view to making quick return.
They also said that in most of cases, abnormal price movements of such companies were not logical considering their fundamentals.
Mainul Hasan, an investor, said that there was no relationship of the financial information of the newly-listed companies with the abnormal price hike.
‘Manipulator might be using the intense public interest on the newly-listed companies to push the share prices of the companies’ abnormally,’ he said.
Shah Forkan, another investor, said, ‘I don’t believe that the unusual price hike of the newly-listed companies is purely reflection of investors’ interest and indiscriminate investment decision.’
Manipulators and the issue managers are jointly involved with such unusual price hike, he said.
Of the 14 newly-listed companies under the ‘N’ category of the Dhaka Stock Exchange, share prices of the entire companies rose abnormally in first few days of their debut trading.
Despite several regulatory measures, including downsizing profits, Shahjibazar Power Company shares closed at Tk 338.80 on Tuesday, gaining by 8.73 per cent or Tk 27.20.
The share price of Shahjibazar has now increased by around 1,200 per cent or Tk 313 from its issue price of Tk 25 since its debut on July 15 this year despite all regulatory measures.
Share prices of Western Marine Shipyard rose by 77.14 per cent to Tk 62.70 from its debut trading on November 2. Each share of Tk 10 face value of the company was traded at Tk 91.30 on November 9, while shares of the company were issued at Tk 35 each.
The share price of Khulna Printing rose by 371 per cent to Tk 37.10 on its debut compared to the issue price of each share of Tk 10, but prices of the company’s shares subsequently declined to Tk 23.50 on October 2.
The share price of Appollo Ispat Complex increased to Tk 40.80 in just 14 days of its debut on December 24 last year, but had failed to sustain the price and subsequently declined to Tk 25.60.
The shares of the company were issued at Tk 22 each.
The share prices of Mozaffar Hossain Spinning Mills skyrocketed by 453 per cent to Tk 45.30 on its debut trading. The issue price of the company’s shares was Tk 10. But, its shares were last traded at Tk 22.30 each on October 2.
Emerald Oil Industries, Far Chemical Industries, Far East Knitting and Dyeing Industries, Hwa Well Textiles, Matin Spinning Mills, The Peninsula Chittagong, Ratanpur Steel Re-Rolling Mills, Saif Powertec, Shurwid Industries and Tung Hai Knitting & Dyeing are the other newly-listed companies which witnessed sharp fall in their share prices after skyrocketing in first few days of their debut.
Former Bangladesh Securities and Exchange Commission chairman Farook Ahmed Siddiqui said, ‘One reason for the unusual price hike of the newly-listed companies’ shares might be craze among the investors to buy such shares without considering fundamentals of the companies to get quick return. In that case, the investors need to have the knowledge to judge the fundamentals of a company.’
‘Another reason might be manipulators’ role. It may be the manipulators who are playing the main role behind abnormal price hike of the newly-listed companies’ shares,’ he said.
‘On the other hand, the capital market regulator should check and verify whether there is any sort of intention behind the financial disclosures making by the companies,’ Siddiqui said.
-With New Age input
