The securities regulator has asked the Dhaka Stock Exchange (DSE) to investigate the unusual price movements and trading volumes of shares in Islami Bank Bangladesh.
Islami Bank stock price soared 116 per cent to Tk Tk 70.4 on Wednesday at the Dhaka Stock Exchange after the downfall of the Awami League government on August 5, making it the most-valued bank stock now.
Islami Bank also featured on the top turnover list recently.
"It has been observed that the price movements and trading volumes of Islami Bank shares have fluctuated significantly in recent times, which appears unusual and suspicious," said the Bangladesh Securities and Exchange Commission in an order issued on Wednesday.
The DSE has been instructed to investigate the trading of Islami Bank shares from August 6 to September 25 to identify any reasons, such as market manipulation, insider trading, and other market abuses, behind the unusual price movement and trading volumes, according to the BSEC order.
The DSE has also been asked to submit the investigation report to the surveillance department of the BSEC within 30 days from the date of issuance of the order.
Islami Bank's stock price began to rise following the ouster of then prime minister Sheikh Hasina on August 5, as investors showed increased interest in the stock after the bank was freed from S Alam Group's control on August 22.
Owing to sharp price hike, the market-cap of the country's leading Shariah-based bank also exceeded Tk 100 billion-mark for the first time since the listing to reach Tk 103 billion on Wednesday.
A leading broker said there is a substantial hype surrounding Islami Bank shares, with investors believing that the bank's situation will improve as it has been separated from S Alam Group.
Islami Bank was the best performing bank before the hostile takeover by S Alam Group in 2017. The bank had surpassed all other banks in the country in terms of deposits, loan recovery and other crucial indicators.
After a hostile takeover, S Alam Group and its sister concerns have reportedly taken around Tk 500 billion in the last seven and a half years in violation of banking rules, making Islami Bank suffer from a severe liquidity crisis.
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