No dividends, still stock prices soar
Khulna Printing & Packaging, listed in both the Dhaka and Chittagong stock exchanges, declared no dividend for their shareholders this year and yet its stock price has been soaring following the announcement on Monday in a curious development.
The packaging material producer has been incurring huge losses over the last few years, so it informed on October 29 through the website of the Dhaka Stock Exchange (DSE) that it would not be giving any dividend in 2018.
But its stock price leapt 29.73 percent to Tk 19 in the last four days. More interestingly, there were no sellers for the stock at various points during the yesterday's trading session.
Similarly, Beach Hatchery, another junk stock that declared on October 30 that it would not offer any dividend, saw its stock price escalate following the discouraging announcement.
On the other hand, many 'A' category stocks tumbled despite giving lucrative dividend.
“It's a totally abnormal behaviour,” said Abu Ahmed, a stock market analyst, while suspecting foul play.
Some people are playing with these stocks.
Real investors are discouraged by such abnormal movements, so the stock market regulator should look into this seriously, said Ahmed, also a former chairman of Dhaka University's economics department.
Small investors should be careful before making their decisions as they can lose money if they invest on overvalued company or junk stocks, said Mostaque Ahmed Sadeque, president of the DSE Brokers' Association.
DSEX, the benchmark index of the DSE, dropped 25.65 points, or 0.48 percent, to close the day at 5,258.47 points. Turnover, another important indicator of the market, soared 3 percent to Tk 529.95 crore yesterday.
SK Trims & Industries was the top traded stock with its transaction of 51.66 lakh shares worth Tk 19.30 crore. It was followed by Khulna Power, Intech, United Power Generation and Nurani Dyeing.
Saiham Textile was the day's best performer with its 9.95 percent gain, while United Insurance was the biggest loser, sh8.42 percent. Losers outnumbered gainers by 174 to 118, while 50 securities remained unchanged.
Chittagong Stock Exchange also witnessed a fall: its key index declined 21.04 points to finish the day at 9,795.06 points. The port city bourse traded 1.01 lakh shares and mutual fund units worth Tk 31.60 crore.
