Share price of Imam Button Industries, a junk stock, is rising on the Dhaka Stock Exchange (DSE) though the company incurred losses and not giving dividends for many years.
Within 10 trading days, the company's share price jumped more than 31 per cent or Tk 10.70 each to close at Tk 45.10 on Wednesday in the volatile market.
The 'Z' category stock price soared 87 per cent or Tk 21 each in the last three months since January 16, 2022, the DSE data shows.
In the last one year, its shares traded between Tk 19.10 and Tk 48.50 on the prime bourse.
The companies that fail to declare dividends, arrange annual general meetings on time or keep their factories shut for six months in a row, stock exchanges put them into the 'Z' category.
Imam Button failed to pay dividends since 2011. The company disbursed 10 per cent stock dividend last in 2010.
The company has also reported loss of Tk 0.51 per share in nine months for July 2019-March 2020 as against loss of Tk 0.29 for July 2018-March 2019.
The company's production remained suspended for two years since April, 2020.
Earlier, the company replied to a DSE query that it was unable to earn sufficient revenue, for which it has been making losses since 2011.
"The company is unable to utilize their production capacity at satisfactory level due to insufficient sales order and the sale order is totally stopped due to the pandemic".
Despite suspension of production and failing to declare dividends in a decade, the company's share price did not stop rising.
The recent 'abnormal' price hike prompted the DSE to serve a show-cause notice on the company Tuesday.
The company, however, in response said: There is no undisclosed price sensitive information for recent unusual price hike and increase in the volume of shares of the company.
"Even after serving of show-cause notice, the company's share price has not stopped rising and rose 1.53 per cent further on Wednesday, which may hit the innocent investors," said an analyst.
Market insiders said some companies with low performance records also made their way into the top gainers' list of the DSE frequently, riding on a rumour that the investors are putting money in the securities.
"The influential investors by disseminating rumours are trying to manipulate the prices of shares of many companies to make quick-profit," said a leading broker.
He said the investors are chasing these stocks without conducting any proper analysis, as they see continuous rise in values.
"If these stocks face corrections, general investors will be the ultimate losers, which will dent their confidence," he said.
Senior executives of the company could not be reached over the telephone.
The company's paid-up capital is Tk 77 million and authorised capital is Tk 100 million, while the total number of securities is 7.70 million.
The sponsor-directors own 30.08 per cent stake in the company while the institutional investors own 9.01 per cent and the general public 60.91 per cent as on March 31, 2022, the DSE data shows.
Meanwhile, share price of the newly listed JMI Hospital Requisite Manufacturing topped the gainer list for the tenth straight session on Wednesday, since it made share trading debut on March 31.
The medical equipment manufacturer's share jumped 157 per cent or Tk 31.40 each in 10 trading days to close at Tk 51.40 on Wednesday.
The company's unaudited profits increased to Tk 59.77 million for October-December, 2021, up by 9.47 per cent, from Tk 54.60 million in the corresponding period.
babulfexpress@gmail.com
