Khan Brothers PP Woven Bags has raised eyebrows after a significant and unexpected surge in its share price, despite the company posting losses and not declaring dividends for the last two fiscal years, including 2022-23. Over a brief period of just 14 trading sessions, from 25 August to 15 September, the company’s stock saw an extraordinary rise of 150%, closing at Tk176.2 on Sunday.
In light of this unusual price movement, the Bangladesh Securities and Exchange Commission (BSEC) has requested the Dhaka Stock Exchange (DSE) to conduct an investigation. The BSEC noted suspicious fluctuations in both the price and trading volume of Khan Brothers’ shares and called for an inquiry to uncover possible causes, including potential market manipulation or insider trading.
The DSE is required to submit a detailed investigation report to the BSEC’s Surveillance Department within 30 working days. Furthermore, the exchange has been directed to alert its AR/Compliance Officer or CEO of any irregular trade activities that may point to violations of securities regulations.
This is not the first time Khan Brothers’ shares have seen a steep rise. Earlier this year, in mid-February, the stock price surged to Tk231 before dipping below the face value of Tk10 by April. On 25 August, the shares traded at Tk78.4, only to climb again and hit Tk176.50 on Sunday, representing a 5.94% increase, or Tk9.9 per share.
Despite the sharp rise, the company reported a loss of Tk20 lakh during the first nine months of the 2023-24 fiscal year. Previously, the DSE issued query notices regarding the stock’s rising price on 10 July and 1 September. The company responded that no undisclosed price-sensitive information existed to explain the surge.
Khan Brothers PP Woven Bags Industries, which went public in 2014, raised Tk20 crore through its listing to fund machinery purchases, building construction, and debt repayment.
