Orion Infusion's stock more than doubles in 3 months

Orion Infusion, a concern of Orion Group, has witnessed a remarkable surge in its stock price on the Dhaka Stock Exchange (DSE), with shares more than doubling in value in just three months.
Its stock price rose from Tk 291 on November 21 last year to Tk 699.5 on Tuesday last even though there is no specific reason for investors to be keen on betting on the stock.
The company's stock price is soaring at a time when most blue chip stocks are struggling to draw buyers' attention after the removal of the floor price.
Stock market analysts suspect that price manipulation might be behind the unusual hike as its earnings and dividend payout remained low.
Orion Infusion made a profit of Tk 21.8 million in July-December last year, as against Tk 21 million in the same period a year before.

Many low-profile companies' stocks are significantly beating their industry peers in recent months that are in regular business operation, posting profits and giving dividends to their shareholders.
"The price hike is unusual considering the current status of the company," said Prof Abu Ahmed, former chairman of the economics department of the University of Dhaka.
The investors keep chasing its stock as it flies on the bourses to make capital gains overnight, a tendency that manipulators cash in on by selling off overvalued stock to general investors, said Prof Ahmed.
"Many low-performing stocks are still favourites among a section of investors even though these securities are believed to be manipulated," Prof Ahmed added.
At the end of Tuesday's trading, the price-earning (PE) ratio of Orion Infusion stood at 328, much higher than the overall market PE.
The overall DSE market PE ratio, which is around 18, showed that Orion Infusion's stock is already overpriced. A high PE ratio creates more risk to the investors, especially to the marginal ones.
The recent unusual price movement prompted the DSE to serve show-cause notices to the company several times, enquiring about the reasons behind the price surge.
The company, however, replied that there is no undisclosed price-sensitive information (PSI) which might influence the stock price movements.
Even after the show-cause notice served, the company's share price did not retreat.
The company's stock price started to go up after its board decided to issue rights shares to increase paid-up capital in order to meet the regulatory requirement.
On November 5 last year, Orion Infusion's board decided to issue one rights share against existing two shares at Tk 20 each, including Tk 10 as premium per share, subject to approval from the stock market regulator in compliance with the relevant laws.
The rights share issue is an offer of new shares by a company to its existing shareholders in proportion to the shares they already own and usually at a discount to market price within a specified time.
In 2022, the Bangladesh Securities and Exchange Commission (BSEC) asked a number of small-cap companies to raise their paid-up capital to at least Tk 300 million to comply with regulatory obligations.
Orion Infusion has planned to increase its paid-up capital from Tk 203.60 million to Tk 305.40 million by issuing rights shares to comply with the regulatory requirement.
"Rights shares issuance news might be a reason for price jump as a group of investors keep chasing its stocks not to miss out on the opportunity to make gains," said a merchant banker, who declined to be named.
In 2022, Orion Infusion's stock had also ballooned more than 12 times in just four months despite repeated warnings from the company that it has no undisclosed information.
Its stock price skyrocketed to Tk 973, from Tk 84 between June 26 and October 27 in 2022 riding on rumours that the company was going to issue rights shares.
However, the share price went downward in the next four months and tumbled to as low as Tk 255 on March 28 last year before starting to rise again.
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