The number of 'Z' category companies continued to rise in both the bourses as a good number of 'A' and 'B' category companies and newly listed ones have been placed to the poor performers' group following their failure to recommend any dividends.
Some companies have told the FE that they have failed to recommend any dividend for the year ended on December 31, 2013 due to loss incurred in last quarter of that year.
According to data available on Dhaka Stock Exchange (DSE), 11 'A' category companies were shifted to 'Z' category group during the period of March 31, 3013 to May 4 this year.
The companies' market prices also went down significantly along with the news of their degradation.
The DSE Monday announced that another company named Information Services will be placed to 'Z' category from 'B' category today (Tuesday) following its failure in recommending any dividend.
On Monday the share price of Information Services went down by 29.07 per cent following the news of declaring no dividends.
With this, presently the number of 'Z' category company stands at 32 whereas the number was 20 before March 31, 2013.
The market insiders have said the tendency of present dividend declaration indicates that the number of 'Z' category companies is likely to rise more.
Fareast Finance and Investment was shifted to 'Z' category on April 24 last from the existing 'N' category just after seven months the company made its debut trading.
The company has failed to recommend any dividend for the year ended on December 31, 2013.
Beximco Synthetics and Shinepukur Ceramics were shifted to 'Z' category from the 'A' category on May 4 last. Both the companies did not recommend any dividends for the year ended on December 31, 2013.
The vice chairman of the Beximco Group Mr. Salman F Rahman has said their Beximco Synthetics and Shinepukur Ceramics have failed to incur profits in last quarters of 2013.
"The local cloth traders are the main customers of the Beximco Synthetics. The company's profits went down in last quarter of 2013 due to unrest situation prevailed in the country," Rahman told the FE.
He said the profits of Shinepukur Ceramics went down due to fall in the company's export.
"The company's sales were also reduced in local market during the last quarter of 2013 coupled with the restriction of GSP facilities in US market," Mr. Rahman added.
The Familytex (BD) was shifted to 'Z' category from 'N' category on August 5, 2013 as the Company was not able to approve any dividend for the year ended on December 31, 2012.
Foysal Ahmed, the chief executive officer of the Familytex (BD), said their company will be placed to 'A' category soon following the dividend declaration for the year ended on December 31, 2013.
The other companies which were shifted to 'Z' category from the 'A' category in 2013 are: Jute Spinners, Rahima Food Corporation, CVO Petrochemical Refinery, Daffodil Computers, Gemini Sea Food and R.N. Spinning Mills.
A company will have to recommend at least 10 per cent dividend to exist in 'A' category. A company will exist in 'B' category if it declares the dividend which will be below 10 per cent and above zero per cent. And a company will be shifted to 'Z' category for not holding AGM (annual general meeting) regularly or for not recommending any dividend or for not having continuous operation for more than six months.
The DSE Managing Director Swapan Kumar Bala has differed with the companies' categorisation as per the dividend policy.
"The companies' other performances especially the operating cash flow per share should be considered for the categorisation," Mr. Bala told the FE.
Aziz Pipes also did not recommend any dividends for the year ended on December 31, 2013 and subsequently the company was shifted to 'Z' category.
National Housing Finance and Investment was degraded to 'B' category from 'A' ones on June 3, 2013.
Kay and Que (BD) was degraded to 'Z' category from 'B' ones on June 6, 2013.
Premier Leasing was placed to 'Z' category from 'B' ones on June 26, 2013.
The other companies which were shifted to 'Z' category for not recommending dividends in 2013 are: BD Autocars, BD Welding and Modern Dyeing.
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