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Unusual Surge in Share Price of ‘Jute Spinners’ Raises Eyebrows on DSE

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Jute Spinners

In a significant development, the auditing authority, the industry Shafiq Basak & Co. a regulatory body, has raised concerns about the participation of Jute Spinners, a listed company, in the stock market. The company’s operations have been deemed risky due to the prevalence of speculative trading. In a recent report, Safik Bosak & Company highlighted the potential hazards associated with the continuous surge in speculative trading, which has resulted in an upward trend in the company’s stock. Despite being labeled as a risky venture, Jute Spinners persists in trading shares while the regulatory authority keeps a watchful eye on their activities through the Supervision Division.

Jute Spinners, despite being listed in the stock market almost four decades ago, has consistently failed to provide any returns to ordinary investors. However, the company’s share price has been increasing abnormally. The management of Jute Spinners denies any specific reason for the surge in share prices. According to the company’s secretary, A.T.M. Mostafa, even if all operations of the company were shut down, it would still have to pay a yearly loss of 6 crore Bangladeshi Taka to the bank as interest. Consequently, the rate of this loss keeps rising regularly. Investors can only speculate as to why they are purchasing shares of Jute Spinners.

Mohammad Rezaul Karim, the Executive Director and spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), has stated that the BSEC’s Surveillance Department is investigating the current surge in the share price of a particular company. Our investigation has revealed that the price has been consistently rising since the purchase of more than 60,000 shares from a single individual account. We are looking into this matter and will take legal action if any irregularities are found. The decrease in the company’s paid-up capital has resulted in a reduced number of shares, leading to a sudden increase in share prices for investors. Previously, the company had also been under scrutiny due to artificial price escalation. The BSEC is closely monitoring the situation.

Al-Amin, a financial analyst and Assistant Professor at Dhaka University stated to Orthosongbad that even though a company is publicly listed, if there is information available that indicates the organization will generate profits, individuals may choose to invest in its shares. Furthermore, if the paid-up capital is low, it could be a cause for concern. This is because there is a prevailing practice that if the paid-up capital falls below 30 crore taka, the company will be transferred to ATB platform. However, increasing paid-up capital requires compliance with the law, maintaining company reserves, generating income, and distributing dividends. Ultimately, the decision to invest lies with the individual investor.

Read More: Jute Spinners in Manipulation, Recovery from Loses to Take 50yrs

The sudden surge in Jute Spinners’ share price has raised concerns and questions among investors in the Dhaka Stock Exchange. The company’s financial instability, lack of profitability, and excessive reliance on loans have contributed to the prevailing uncertainty surrounding the company’s future prospects.

 

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Dhaka Bourse Skyrockets, Achieving 4-Day Gaining Streak

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Bourse dse indices turnover stock exchange

Dhaka Stock Exchange DSE, Bourse on the last working day of the week, 20th June, ended with a hike in Indices and Turnover from the previous working session. This information is known from DSE sources.

452 crore 94 lakh taka shares were traded on this day. 206 crore 50 lakh more tradings were done in DSE today compared to the previous workday, June 19th, Shares worth Tk 246 crores 44 lakh shares were traded last time, Wednesday

The benchmark DSEX increased 82.74 points or 5,244 The Shariah-based index DSES added 24.78 points or 1,146, and the blue-chip index DS30 gained by 31.34 points or 1,875.

Of the issues traded, 288 advanced, 55 declined and 50 remained unchanged.

Linde Bangladesh Limited ranked top gainer on DSE, the share price increased by Tk 424.10 paisa or 43.04 percent. On this day, the share was last traded at Tk 1409.40 paisa.

Global Heavy Chemicals Limited ranked top loser on the DSE, the share price dropped by Tk 1.20 paisa or 3.00 percent. On this day, the share was last traded at Tk 38.90 paisa.

DSE topped on trade is Asiatic Laboratories Limited 14 crore 63 lakh takas of company shares have been traded.

A total of 45 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 71 lakh 39 thousand 978 shares of the companies were traded. The financial value of which is 113 crore 38 lakh taka.

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National Tea Sets New Subscription Date for Tk279.7cr Placement Shares

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National Tea Company Limited, a publicly traded entity, has announced new subscription dates for its Tk279.7 crore placement shares. Originally slated for nearly a year ago, the subscription had been postponed by regulatory authorities but is now set to proceed following a recent court directive.

According to the company’s disclosure, the subscription period will run from June 19 to August 19 during banking hours. This follows a letter from the Bangladesh Securities and Exchange Commission (BSEC) instructing the resumption of the capital-raising initiative, in compliance with a High Court order.

The primary objective of issuing these placement shares is to fuel business growth, finance working capital, and repay bank loans. However, due to a funding shortfall, the company has been unable to complete its modernization projects and other initiatives, resulting in decreased turnover caused by declining average sale prices in the auction market for its products.

Following the court’s directive, significant progress has been made in implementing the state-owned company’s plans.

In July of the previous year, Jakir Hossain Sarkar, a minor shareholder with just 10 National Tea shares, filed a writ petition with the High Court opposing the company’s scheme to issue fresh shares as approved by the BSEC, alleging unequal treatment of existing shareholders. The court later upheld the BSEC’s approval. Upon a petition by the market regulator, the Appellate Division’s chamber judge temporarily stayed the High Court’s order.

Shareholders have borne the brunt of these legal battles. After the record date, the price of National Tea shares dropped in anticipation of the increased number of shares, and the issuance of placement shares remained uncertain.

In April last year, National Tea received BSEC approval to raise its paid-up capital by issuing 2.34 crore shares at Tk119.53 each, inclusive of a Tk109.53 premium per share. The distribution plan allocated 1.24 crore shares to the government, Investment Corporation of Bangladesh, and Sadharan Bima Corporation at an average ratio of 4.43 new shares for each existing share. Sponsor-directors were allocated 13.8 lakh shares at a ratio of 3.21:1, and general shareholders were to receive nearly 96 lakh shares at a 2.85:1 ratio.

As of Wednesday, National Tea shares closed at Tk388.60 each on the Dhaka Stock Exchange. Founded in 1978 and listed on the capital market in 1979, National Tea cultivates, manufactures, and sells tea and rubber in the local market. The company’s average annual production is about 52 lakh kg of tea, most of which is sold through the Chattogram auction market.

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Renata Launches First Terbinafine Shipment to the UK

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Renata PLC, a leading pharmaceutical manufacturer in the country, has successfully exported its initial consignment of Terbinafine tablets to the United Kingdom, marking a significant milestone in its export portfolio.

The company’s secretary, Md Jubayer Alam, announced that this shipment expands Renata’s export range to 17 distinct products within the UK market. “We have received an order of approximately 200,000 boxes, valued at £150,000,” he stated.

In local currency terms, this translates to an export value of over Tk2.23 crore.

In a disclosure to stock exchanges on Wednesday, June 19, Renata PLC detailed the dispatch of the first batch of Terbinafine 250 mg tablets to the UK, where the product will be marketed under the brand name Terbimax. The tablets are manufactured at Renata’s MHRA-approved facility in Rajendrapur, Gazipur, and will be distributed by Renata (UK) Limited.

Terbinafine, an allylamine antifungal, is commonly used to treat onychomycosis, a fungal infection of the toenails or fingernails caused by dermatophytes. The global market for Terbinafine was valued at $614 million in 2023. In Bangladesh, this medication is also available under the brand name Terbimax.

Md Jubayer Alam emphasized the strong demand for Terbinafine in the UK. “The market for these products is expanding rapidly. With our entry into this market, we anticipate significant benefits for the company,” he said.

Renata PLC entered the UK market in 2018 through its subsidiary, Renata (UK) Limited. Currently, several products are being commercialized in the UK, supported by agreements with five distribution partners. According to its annual report, Renata (UK) Limited generated a consolidated revenue of Tk7.71 crore in FY23.

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