Jute Spinners posts loss in Q1
Jute Spinners announced losses for the first quarter of the existing fiscal year, a development which might have tamed the company's fluctuating stock price.
The jute yarn and twine manufacturer's earnings per share were Tk 11.16 in the negative in July-September although it was Tk 10.24 in the negative through the same period a year ago, data from the Dhaka STOCK MARKET (DSE) showed.
Jute Spinners' net asset value stood at Tk 360.14 in the negative by September 30, 2020.
Yesterday, the company's share dropped 4.07 % to Tk 146 after its disclosure on the quarterly loss.
Jute Spinners have been performing poorly for quite some time, therefore the sudden rise in its stock price must have been investigated by the market regulator, according to a stockbroker.
The worthiness of Jute Spinners' stocks had doubled during the last four months riding on a rumour that it's becoming a successful company.
Despite repeated announcements that there is no price-sensitive information that could influence the company's share value, the stock jumped from Tk 81 to Tk 180 between July and November this season.
The stock had opted wild and it seemed nothing could possibly be done to avoid it. It declined yesterday after Jute Spinners disclosed its losses for the first quarter.
"Since it is a minimal capital-based company, it is simple to manipulate, which finally allures the gamblers to the stock," the broker said.
The business's paid-up capital was Tk 1.7 crore in the last fiscal year. Its reserve and surplus was Tk 26.7 crore in the negative.
"Investors should be careful when investing based on rumours. Otherwise, their investment will be at risk," the broker said.
When the Bangladesh Securities and Exchange Commission ran an enormous programme to regenerate junk companies, investors had hoped to see Jute Spinners become profitable, said Ali Hasan, a stock investor.
However, the price of the stock was overvalued regardless if it had bounced back.
"The persons behind the stock's overvaluation ought to be held accountable by the regulator," the investor added.
