Hami Industries, a junk stock, has been flying high on the Dhaka Stock Exchange (DSE) despite enduring financial losses and failing to pay dividends for over a decade.
The financial indicators of the 'Z' category company remain deeply negative, with losses piling up. And the company has yet to disclose its annual financial report for FY'24.
Yet, the junk stock price continued to rise to close at Tk 98.70 on Thursday. Just over the past two weeks, the price surged a staggering 30 per cent despite the absence of any new disclosures or price-sensitive information from the company.
Such an unusual price movement in recent times prompted the prime bourse to serve a show-cause notice to the company authority, enquiring about the reasons behind that.
Hami Industries, formerly known as Imam Button Industries, replied to a knee-jerk response this week, saying there was no undisclosed price-sensitive information.
A stock is identified as junk when the company's commercial production has been shut for six months in a row, failed to arrange annual general meetings on time, or failed to provide dividends to shareholders for two consecutive years.
Market analysts suspect that manipulation is the reason behind the "abnormal price" surge as non-performing stocks are dominating the market nowadays.
A hike in the share price was unusual considering the current status of the company, said a leading stockbroker.
The influential investors by disseminating rumours are trying to manipulate the prices of shares of many low-profile companies in the falling market to make a quick profit.
The investors are chasing these stocks without conducting any proper analysis, as they see continuous rise in values, the stockbroker said.
A vested group that does not care about the companies' actual performance is targeting these firms as they have a low number of shares, making them easy to manipulate.
The company's paid-up capital stands at Tk 77 million while the total number of securities is 7.70 million.
Hami Industries is a subsidiary of Imam Group. The factory was shut down in 2018 and its original owners fled the country after arrest warrants were issued in cases filed by banks and financial institutions on default loans.
In January 2023, Bangladesh Securities and Exchange Commission (BSEC) restructured its board. ASM Hasib Hasan took over as managing director after acquiring the company's 2 per cent shares.
Under the new ownership, Hami Industries resumed operations in August 2023 after being non-operational for more than five years, transforming its business from button manufacturing to fish and poultry farms.
In January this year, it also set up a shoe-making unit on its factory premises in Chattogram with a total cost of Tk 115.5 million and production capacity of 530 pairs of shoes per day.
When the company announced price sensitive information one after another, its stock price crossed Tk 200 each in November last year.
However, a DSE inspection team in March this year found that the claimed production capacity of shoes was baseless. The DSE team also found no fishes in the Hami Industries ponds.
Last month, the BSEC rejected the company's application to raise capital by issuing 5 million shares at a face value of Tk 10, citing it submitted fabricated documents to justify the utilisation of share money deposits.
Early September this year, the new BSEC commission fined Hasib Hasan Tk 10 million for share price manipulation. However, he died on September 22 and following his death, the company fell into further trouble.
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