Shinepukur Ceramics has been flying high on the Dhaka bourse despite facing significant operational and financial challenges since the political changeover in August last year.
The tableware manufacturer's stock jumped 76 per cent in the month through Sunday to Tk 22 per share on the Dhaka Stock Exchange (DSE).
The surge in the share price of the straggling company has raised suspicions of stock manipulation.
Speculative trading and price manipulation might be the reasons behind such an "abnormal" escalation of the stock price, said Akramul Alam, head of research at Royal Capital.
Non-performing stocks have been beating their industry peers in recent times, which are in regular business operation, posting profits and giving dividends to their shareholders.
Gamblers pushed up the prices of low-performing shares through serial trading and then spread rumours among general investors. Some investors aim to make hefty profits overnight and get trapped by gamblers.
Shinepukur Ceramics is a concern of Beximco Group owned by Salman F. Rahman, former industry advisor to ousted prime minister Sheikh Hasina.
With Sheikh Hasina gone from the political landscape in August last year, Mr Rahman finds himself behind bars. He was arrested on August 13 last year. A series of financial irregularities involving Mr Rahman and his business empire came to light.
The group started facing difficulties in securing letters of credit (LC) for raw material imports as banks showed reluctance in providing fresh funds to the conglomerate already submerged in bad debts.
Meanwhile, the government shut all factories under Beximco's textile division two week ago. Workers dues are to be paid from a borrowed fund of Tk 5.25 billion from the government.
Although Shinepukur Ceramics has remained operational, it has been facing financial challenges and operational difficulties. It suffered a loss of Tk 198.8 million in July-December last year.
Despite these setbacks, the stock continued its upward trajectory, gaining 10 per cent further on Sunday, becoming the day's top gainer.
The prime bourse has sought an explanation from the company recently regarding the unusual increase in its share price.
The company said it had no undisclosed price-sensitive information.
Meanwhile, the High Court scrapped the receiver appointment order on Thursday [March 13], allowing Beximco Group to continue business by its own administration from now on.
Considering the interests of thousands of workers and employees, the HC allowed Beximco Group to continue managing its companies on its own in strict compliance with the law.
Delivering its verdict on a writ petition, the HC also ordered the Bangladesh Bank to take necessary steps to recover the defaulted and classified loans within legal means.
Beximco Group reportedly has more than Tk 400 billion in loans taken from several banks, most of which turned sour. Shinepukur Ceramics has short-term loans of Tk 694 million as of December last year.
Last week, the Appellate Division of the Supreme Court also cleared the way for nine independent directors, appointed by the Bangladesh Security and Exchange Commission (BSEC) to BEXIMCO, Beximco Pharmaceuticals, and Shinepukur Ceramics, to resume their duties.
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