Loss-making companies kept their dominance on the Dhaka Stock Exchange's (DSE) chart of top gainers on Monday, while good performers witnessed no or very insignificant appreciation on the bourse.
Seven out of the top 10 gainers have been in the red for at least the past three quarters through March this year. These entities have not provided dividends for years and are struggling to keep production running.
One of them is Meghna Pet Industries that soared 10 per cent on the DSE on Monday, becoming the day's top gainer.
It has been counting losses for more than a decade.
The junk stock made it to the list several times in recent times, raising questions about investors' preference for the stock despite its poor performance.
A company's stock is labelled as junk when its commercial production has remained shut for six months in a row or it has failed to arrange annual general meetings on time or failed to provide dividends to shareholders.
Standard Ceramic Industries, which incurred losses of Tk 142 million in the two years to FY23, saw a 9.9 per cent price hike on Monday.
The tableware manufacturer reported negative earnings of Tk 99 million in the nine months through March this year.
The stock of Central Pharmaceuticals soared 9.9 per cent on Monday although it endured losses for the past four years. The losses piled up to Tk 1.23 billion until FY23.
The loss-making drug maker has not declared any dividend after FY19 when it disbursed only 1 per cent cash dividends to shareholders.
Losses of Global Heavy Chemicals -- a manufacturer and distributor of Sodium Hydroxide (Caustic Soda), Chlorine, and other chemical products - amounted to Tk 528 million in the two years to FY23.
The company's losses almost tripled year-on-year to Tk 300 million in the nine months through March this year.
Despite the grim performance, the stock soared 9.9 per cent, becoming the sixth highest gainer on Monday.
Without business growth a company exhibits a rally in the stock market when a certain group of people influence the price while others join the rally not to miss out on the opportunity to make quick bucks, market insiders say.
Companies with low paid-up capitals often become targets for price manipulation. Monday's price escalation of poor-performing stocks was, according to analysts, a result of manufactured demand of the securities.
Prof Abu Ahmed, former chairman of the economics department of the University of Dhaka, suspected that a group of dishonest people had been behind the artificial price hikes.
"These are risky bets. Investors should think twice before putting money in these troubled stocks," he added.
The stocks, however, have an insignificant impact on the index. As a result, the DSEX, the benchmark index of the DSE, went up only 1.96 points to settle at 5,235 on Monday.
On the other hand, stocks of most large-cap companies have continued to decline on the bourses since the lifting of the floor prices.
Last week, five junk stocks -- BIFC, Global Heavy Chemicals, Khulna Printing and Packaging, First Finance, and Tung Hai Knitting -- appeared on the gainers' list.
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