Imam Button Industries flies high on DSE though business is in the red

Junk stock Imam Button Industries has been flying high on the Dhaka Stock Exchange for the last one month though the business has been in the red for a decade.
Its financial indicators are in the negative. Losses have been piling up. As per the latest financial disclosure, the company suffered a loss of Tk 3.93 million in the nine months through March 2020 while the figure was Tk 2.23 million in the same period a year ago.
The company has not published any financial statement since March 2020.
Yet, the junk stock climbed an astounding 53 per cent to Tk 127.20 in the month to Thursday based on a rumour about production resumption. The company has kept its operation shut since April 2020.
Imam Button Industries rose on the DSE at a time that coincided with regulatory efforts to help it come back to operation, market insiders said.
Prof. Mohammad Sogir Hossain Khandoker and ASM Hasib Hasan have been appointed as chairman and managing director of the company recently.
The company also appointed S. Faisal Ali as company secretary.
He could not be reached for comments.
The company replied to a DSE query, saying that there is no possibility of the factory resuming operation anytime soon.
Market experts said a vested quarter had been boosting its share price by spreading rumours about the company's production resumption.
This happens at a certain time every year. As the company's paid-up capital is low -- Tk 77 million -- it is very easy to manipulate the share price. The total number of securities is 7.70 million.
Earlier its stock price soared more than 500 per cent to reach Tk 150 within a year through December 2022 before falling 45 per cent in the next six months.
A hike in the share price is unusual considering the current status of the company.
General investors are falling into the trap of manipulation and investing in the stock, looking for quick profits.
A stock is identified as junk stock when the company's commercial production has remained shut for six months in a row, it has failed to arrange annual general meetings on time, or has failed to provide dividends to shareholders. The stock exchanges put such stocks into the 'Z' category.
Imam Button failed to pay any dividend since 2011. It disbursed 10 per cent stock dividend in 2010 for the last time.
Influential investors have been trying to manipulate prices of shares of many low-profile companies in the bearish market to make quick profits.
General investors are chasing these stocks without conducting any proper analysis, as they see continuous rise in values.

babulfexpress@gmail.com