FE REPORT
Nine more companies were downgraded to the Z category on the Dhaka bourse with effect from Sunday, as they failed to hold annual general meetings (AGMs) within the stipulated timeframe.
Among the firms, Alif Industries, Best Holdings, Gemini Sea Food, First Securities Islami Bank, and Beach Hatchery have been relegated from the A category, while S Alam Cold Rolled Steel, Oimex Electrode, Kattali Textile, and Fu-Wang Food have been moved from the B category.
As per the listing regulations, listed companies must complete audits of annual financial reports within four months of the end of the financial year and hold an AGM within six months.
However, all nine companies, whose financial year ended in June last year, failed either to publish audited financial statements or to hold AGMs within the timeframe.
In a regulatory directive issued on Sunday, stockbrokers and merchant bankers were requested not to provide margin loans to investors to purchase these securities.
Following the news, stocks of all these companies plunged by more than 9 per cent on Sunday on the Dhaka bourse.
Alif Industries' stock plunged 9.98 per cent to Tk 37 per share on Sunday. Its profit rose 30 per cent year-on-year to Tk 104 million in FY24, and the company provided 10 per cent cash and 10 per cent stock dividends for the year.
Gemini Sea Food's stock fell 9.98 per cent to Tk 124.5 per share on Sunday. The seafood exporter's profit tumbled 47 per cent to Tk 50 million in FY24. Despite the profit erosion, it disbursed 7.5 per cent cash and 7.5 per cent stock dividends in FY24.
Best Holdings' stock dropped 9.70 per cent to Tk 12.1 per share on Sunday. Its profit rose 24 per cent to Tk 1.41 billion, and it paid 10 per cent cash dividends for FY24.
S Alam Cold Rolled Steel's stock also plunged 9.4 per cent to Tk 13.5 per share on Sunday. The steel manufacturer is linked to S Alam Group and is facing significant challenges, such as the freezing of bank accounts and bank restrictions on opening letters of credit following a political changeover. The company failed to declare dividends for FY24 and FY25.
The stock price of Oimex Electrode dropped 9.68 per cent to Tk 14 per share on Sunday. The company, however, reported a profit of Tk 55 million in FY24 and paid 3 per cent cash dividends for the year.
Kattali Textile raised Tk 340 million from the stock market in 2018 for business expansion, but the company's business started to decline within two years of listing due to numerous irregularities.
The stock market regulator found Kattali Textile's involvement in money laundering and urged the Criminal Investigation Department (CID) to take action as per the law.
Beach Hatchery's stock lost almost 10 per cent to Tk 42.5 per share on Sunday. The company made a profit of Tk 84 million in FY24 and paid 10 per cent cash dividends for the year.
Fu-Wang Food's stock dropped 9.82 per cent to Tk 10.10 per share on Sunday. The company has been suffering losses for the past three consecutive years, and accumulated losses stood at Tk 340 million until FY24.
The total number of Z-category stocks has now reached 110, out of 359 companies listed on the prime bourse.
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