The newly-listed securities saw a remarkable price surge in 2023, as opportunist investors chased after these stocks in anticipation of quick gains.
In 2023, two firms and a mutual fund got listed in the main market of the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE), while three small-cap companies on the bourses' SME platforms.
The new securities escalated by 28 per cent to 450 per cent in the year on the bourses, as investors showed more interest in new stocks.
Trust Islami Life Insurance, which had its debut trading in the bourses' main market in May last year, emerged as the best performing stock of 2023, having soared 450 per cent.
The new generation life insurer has a post-IPO paid-up capital of Tk 400 million after raising Tk 160 million under the fixed price method.
Analysts say investors showed enthusiasm surrounding the newly-listed securities expecting short-term gains.
According to Prof Abu Ahmed, former chairman of the economics department of the University of Dhaka, the prolonged absence of trading in well-performing stocks led to such a trend.
"Newly-listed stocks often jump, especially in the first few trading days, and then start declining." But the trading pattern of the new stocks looks unusual, said Prof Ahmed, suspecting price manipulation.
Investors mainly focused on harnessing short-term gains instead of taking long-term positions in equities due to wavering confidence regarding the market momentum, said EBL Securities, in its yearly review.
MK Footwear, which got listed on the SME board by raising Tk 100 million through a qualified investors offer in 2023, saw a 400 per cent price surge.
It was followed by another SME firm -Al-Madina Pharma, rising 307 per cent to close at Tk 40.7 on Thursday, the last trading session of the year.
The SME companies have a low paid-up capital, with a small number of shares, which makes it easy for gamblers to manipulate the price, said Prof Ahmed.
EBL Securities, however, said the SME platform of the DSE was expected to see an increased investor participation in 2024 as a number of new companies had been listed and that some companies, which had fulfilled the required criteria, might get transferred to the main board.
Midland Bank, which raised Tk 700 million and got listed in March last year, rose 44 per cent by the end of 2023, while other bank stocks had struggled to attract investors.
Currently, the stock prices of 29 out of 35 banks are stuck on the floor, while eight banks are trading below the face value of Tk 10 each share.
In 2022, two banks -- Global Islami Bank and Union Bank -- got listed and performed poorly; their fell below the face value of Tk 10 each share after their debut trades.
Currently, Global Islami Bank and Union Bank are on the floor -- at Tk 8.60 and Tk 8.90 each share respectively.
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