Himadri, Yousuf Flour beat most of expensive stocks on main board

Two SME stocks --- Himadri and Yousuf Flour Mills -- have become second and third most expensive stocks on the Dhaka Stock Exchange (DSE) without any justified reasons.
That means the money injected into the stocks would hardly have any scope of creating value for investors.
Himadri, which operates six potato cold storages in the northern part of the country, reported a remarkable 68 per cent year-on-year surge in profit to Tk 37.95 million for July-December 2022. It is yet to disclose financial figures for the January-June period of FY23.
If Thursday's closing price of Himadri, Tk 3,713.70, on the SME board and the latest cash dividend [10 per cent] paid by the company to shareholders are taken into consideration to calculate dividend yield, it comes to only 0.026 per cent.
That shows how much an investor can expect as future income from the investment made in Himadri at the price.
At the price of Tk 3,016.70, Yousuf Flour Mills' dividend yield is 0.033per cent.
In contrast to Himadri and Yousuf Flour Mills, big companies listed in the main market, with excellent reputation, healthy earnings, and handsome dividend records, have failed to attract investors amid the current dismal economic outlook and for the imposition of floor price.
The floor price is not applicable to the SME board.
Himadri's escalation on SME board
The stock jumped an astounding 105 times in just four months to Thursday, becoming the second priciest stock after Reckitt Benckiser that traded on the main board.
Himadri started to rise after its listing on the Chittagong Stock Exchange (CSE) in April this year. At that time, the stock price was Tk 35.30 per share.
The abnormal price surge of Himadri in absence of any valid reason has raised questions. Analysts are suspecting manipulation behind the price hike.
Meanwhile, the Bangladesh Securities and Exchange Commission (BSEC) asked the Dhaka Stock Exchange to look into the matter and submit a report within 10 working days from August 30, according to a statement issued on Thursday.
Low paid-up capital makes it easy for gamblers to manipulate the price, said Prof Abu Ahmed, former chairman of the economics department of the University of Dhaka.
"The trading pattern on the SME board looks unusual and the rise of the stock price was mostly driven by manipulation," he added.
Himadri's total number of shares is only 0.75 million, where sponsor-directors own 67.72 per cent, the government owns 1.48 per cent, and individual investors 32.80 per cent, as per the data available until the end of June this year.
It was one of the six companies to join the SME board in September 2021, having transferred from the over-the-counter (OTC) market.
The price surge prompted the CSE to serve a show-cause notice to the company early this week.
To which, the company said on Monday that there was no price-sensitive undisclosed information, except that three directors sold a small number of shares in April this year.
Even after the show-cause notice, the company's share price has not stopped climbing.
In August last year, the securities regulator asked the company's sponsor-directors to offload more shares in the secondary market.
Three sponsor-directors sold more than 0.20 million shares in total in April this year to comply with the directive.
Company secretary Jahirul Islam said, "We have no relation to the price hike of shares in the secondary market."
In June this year, Himadri decided to increase its authorised capital by 25 times to Tk 500 million before increasing its paid-up capital to Tk 300 million to meet the regulatory requirement.
It is yet to execute the plan.
Abnormal rally of Yousuf Flour Mills
Yusuf Flour Mills saw an unusual price hike after the dividend declaration in November last year.
The little known company's stock price jumped almost 23 times in a single day to Tk 594.40 from Tk 26.10 after the corporate declaration as there was no circuit breaker for the stock that day.
Yusuf Flour paid only 10 per cent cash dividend for FY22.
The stock peaked at Tk 3,050 on Thursday before closing at Tk 3016.70, soaring 191 per cent in less than a month since July 11.
In this case as well, Prof Ahmad said a small volume of shares created an opportunity for the artificial price spike.
He said investors were chasing these stocks as they saw them going up and up, without conducting any proper analysis. "If these stocks face corrections, investors will be the ultimate losers."
Yousuf Flour's paid-up capital stands at Tk 6.07 million and the total number of securities 0.60 million.
Company secretary Md Shahedul Islam expressed shock at the inexplicable price surge. "We do not have any undisclosed price sensitive information," he said, which might influence the share price movements.

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