Stocks
No Companies Transitioning to ‘Z’ Category yet, says DSE MD
Recently, due to spreading rumors on social media platforms, the stock market has been adversely affected. There is a rumor circulating in a Facebook group that some companies listed on the Dhaka Stock Exchange (DSE) are transferring to the ‘Z’ category. However, according to Dr. A.T.M. Tariquzzaman, the Managing Director of the Dhaka Stock Exchange, no decision has been made yet to send any company to the ‘Z’ category. He also informed that without the permission of the Bangladesh Securities and Exchange Commission (BSEC), DSE cannot directly send any company to the ‘Z’ category. At the same time, the Managing Director of DSE, Md., stated that tough action will be taken against those involved in spreading baseless information and rumors through social media. He said efforts are underway to identify those who have tried to destabilize the market by spreading such rumors. Strict measures will be taken against the culprits legally so that no one can spread such rumors in the future. DSE is taking stringent steps in this regard.
Recent developments have once again stirred up a self-serving environment, aiming to destabilize the country’s stock market, primarily utilizing the tool of social media, particularly Facebook. A few days ago, rumors about floor prices had created instability in the market, sparking a cycle of speculation. Subsequently, a rift between the regulatory body, BSEC, and DSE, led to the dissemination of various baseless rumors, further destabilizing the situation. Amidst this ongoing turmoil, new rumors have surfaced, alleging that several companies listed on the primary stock exchange, DSE, are being downgraded to the ‘Z’ category. The significant impact of such rumors on market stability is already evident. However, stakeholders have affirmed that these rumors, like previous ones, are baseless.
Dr. A.T.M. Tariquzzaman, the Managing Director of the Dhaka Stock Exchange (DSE), stated on Sunday (March 17th) to Orthosongbad that the information circulating regarding several companies being shifted to the ‘Z’ category by DSE is baseless and mere rumor. No decision has been made by DSE to downgrade any company to the ‘Z’ category at this moment. There is currently no company newly categorized as ‘Z’. Additionally, according to BSEC’s directive, DSE would require commission approval to directly downgrade any company to the ‘Z’ category. However, in the future, DSE may have the authority to directly transfer companies to the ‘Z’ category. Previously, any company transferred to the ‘Z’ category was done so in accordance with the law and after informing BSEC. Dr. Tariquzzaman advised investors not to be alarmed by baseless information and rumors. DSE is working to identify those spreading rumors. Individuals involved in spreading baseless rumors will be identified and brought within the purview of the law to prevent such actions in the future.
On February 15th, initially, 22 companies, and subsequently, on March 4th, an additional 6 companies sent to the ‘Z’ category. However, new rumors have emerged suggesting that several more companies are heading towards the ‘Z’ category, and for those companies whose shares are still trading at floor prices, their floor prices are increasing. Several companies’ lists are being circulated on social media platform Facebook, spreading rumors. Among these lists, several companies have already been categorized under the ‘Z’ category. Despite this, ordinary investors are becoming anxious, believing in these baseless rumors. Market participants believe that such rumors are creating an unstable situation in the stock market. However, as of now, the Bangladesh Securities and Exchange Commission (BSEC) has not taken any decision regarding this matter.
Prior to this, on March 10th, in a press release, BSEC informed about their position regarding the ‘Z’ category and floor prices. Cautioning against rumors, BSEC stated in the press release that baseless rumors about floor prices and the ‘Z’ category are being spread intentionally through social media to incite a particular agenda in the stock market. Currently, the commission has no intention of making any such decision. BSEC has urged everyone to be vigilant against such rumors and has requested cooperation from all parties, including DSE, to counteract those who create such rumors.
It is known that except for six companies, the Securities and Exchange Commission (BSEC) has revoked the floor prices of all other companies’ shares. After the revocation of floor prices, the stock market has gradually regained momentum. From January 29th to February 11th, the Dhaka Stock Exchange (DSE) witnessed a continuous rise for ten consecutive trading days, during which the index gained 368 points. Moreover, from February 1st to February 15th, daily transactions exceeded one billion taka. Between February 4th and February 13th, transactions surpassed four billion taka for eight consecutive trading days. However, the trend of the market’s upward movement has been disrupted by false information and rumors, resulting in a decline in both transactions and indices.
As a result of the rumors, the market has remained in decline for the past few days. Due to the continuous downward trend, on Wednesday (March 13th), the main index of DSE, ‘DSE X’, returned to its previous position before the floor price imposition. On that day, the main index ‘DSEX’ of DSE dropped by 32.76 points to stand at 5,974 points. Previously, on July 28, 2022, the DSE Broad Index ‘DSEX’ fell below 6,000 points. The index stood at 5,980 points. On that day, in the afternoon, BSEC imposed the floor price or the lower limit for shares in the market.
Earlier, on March 7th, the main index of the exchange, ‘DSEX’, lost 53.37 points. The index stood at 6,112 points on that day. Additionally, the index of selected companies, ‘DS30’, decreased by 12 points. And the index of Shariah-based companies, ‘DSES’, dropped by 7.12 points. Since then, the market has been bearish.
Recently, the impactful effects of the rumors surrounding the ‘Z’ category have been observed during the farewell week. During the last week (March 10th to March 14th), the market capitalization at DSE decreased by over 49 billion taka. Moreover, trading at DSE declined by 31.07%. During the week, the main index of the Dhaka Stock Exchange, ‘DSEX’, dropped by 144.72 points
Several organizations have been found involved in fraudulent activities in the stock market, targeting investors by falsely listing companies and engaging in fraudulent practices. They instill fear in various companies by falsely listing them through investor organizations, and subsequently, through legal notices, threaten to retaliate against companies planning initial public offerings (IPOs). The leaders of these organizations then demand bribes. The Dhaka Metropolitan Police’s (DMP) investigation has uncovered such information.
Friday night saw raids in multiple areas of the capital based on intelligence, leading to the arrest of three members of a cartel involved in market manipulation and spreading rumors. Additional Commissioner (Detective) of Police Mohammad Harun-or-Rashid confirmed this information at a press conference held on Saturday (April 27) afternoon.
The share market, where investors are targeted by various organizations, includes the Bangladesh Investors’ Unity Council, the Bangladesh Investors’ National Foundation, the ICB Investor Foundation, the Chittagong Investors’ Forum, and others. Allegations have surfaced that these organizations, through a few individuals, engage in fraud under the guise of ordinary investors, despite having no affiliation with them.
It has been revealed that various companies are targeted for extortion by instilling fear through investor organizations. Among them, if allegations are made against the chairman of BSEC, their IPO will be canceled, they will be defamed, and the media will publish negative news about them, creating fear. Additionally, a legal notice team has been formed. Initial legal notices are sent to companies planning IPOs, followed by demands for bribes threatening to tarnish the names of these organizations.
The arrested individuals are Md. Amir Hossain alias Nurnurani (37), Nurul Haque Harun (52), and Abdul Kaiyum (39).
Chief of DB Harun-or Rashid said in a press conference that three members of a cartel involved in market manipulation and spreading rumors have been arrested based on intelligence obtained through online and social media platforms. They listed various shares in the stock market and engaged in fraudulent activities. Their aim was to destabilize the country’s stock market through various means. Everyone needs to be vigilant about these organizations. If anyone engages in extortion, they will face legal consequences, he advised.
He said, “The stock market is a sensitive place, intricately linked with the country’s economy. Many ordinary investors invest their savings here. There is a high risk of suffering losses here. A selfish cartel has been trying for a long time to destroy the stock market and the country’s economy. They are spreading various false, misleading, and intimidating information through secret groups on Facebook, WhatsApp, and Telegram to harass ordinary investors for their own interests. They are creating volatile situations under the guise of protests using ordinary investors. Bangladesh Securities and Exchange Commission (BSEC) has filed a case at Ramna Model Police Station against various important figures, including the Chairman of the Commission, for providing false and misleading information through Facebook, WhatsApp, and Telegram groups, causing financial losses to ordinary investors.”
The arrested individuals spread false and misleading information in various Facebook, WhatsApp, and Telegram groups to increase the price of various shares and sell them at high prices to ordinary investors and use secret WhatsApp/Telegram groups for this purpose. Members of these groups have to pay a specified fee to join. In case of profit, they do not share the profit.
According to the Bangladesh Securities and Exchange Commission Act, it is illegal to provide information about any share price. Amir Hossain alias Nur Nurani (pretending to be Nurul Haque Harun) has 11 cases under the Explosive Substances Act and Special Powers Act. Nurul Haque Harun, a member of the Bangladesh Investors’ Unity Council, colluded with various members of the organization to extort companies.
Additionally, Abdul Kaiyum is associated with Royal Capital Brokerage House. He provides information about various shares in WhatsApp and Telegram groups.
The arrested individuals spread false and misleading information to increase the price of various shares and sell them at high prices to ordinary investors, using Facebook, WhatsApp, and Telegram groups. They create volatile situations using ordinary investors under the guise of protests. They list various companies in the stock market and extort them for various issues. They start online propaganda if they don’t get extortion money. They even attack company offices.
The arrested individuals spread false and misleading information about various shares in the stock market to increase their prices and sell them at high prices to ordinary investors. They use secret WhatsApp/Telegram groups for this purpose. Members of these groups have to pay a specified fee to join. In case of profit, they do not share the profit.
The Dhaka Metropolitan Police’s Cyber and Special Crime Division has always been working to protect the interests of ordinary investors. Regular monitoring and cyber patrols are being conducted online. Campaigns are ongoing to prevent anyone from benefiting from creating volatile situations in the stock market, causing fear to ordinary investors.
One of the Listed insurance companies, Nitol Insurance Company Limited has recommended 10.5% Cash Dividend for the year ended December 31, 2023.
In terms of financial performance, The Company has also reported Consolidated EPS of Tk. 1.48 for the year ended December 31, 2023.
The Annual General Meeting (AGM) of the company will be held on June 27, through the digital platform. The record date for this has been fixed at May 19.
Q1 Financials: The company’s earnings per share Consolidated EPS was Tk. 0.42 for January – March 2024 as against Consolidated EPS of Tk 0.49 for January – March 2023. As of March 31, 2024, net asset value (NAVPS) was Tk 30.84 paisa.
One of the listed companies, Runner Automobiles PLC discloses its financial reports for the third quarter, (January – March 24).
The company’s earnings per share (EPS) was loss Tk 1.35 paisa in Q3 of the current financial year (January – March 24). EPS was loss Tk 1.41 paisa during the same period last year. NAV per share was Tk. 59.06 as on March 31, 2024.
