Stocks
Unusual Surge in Share Price of ‘Jute Spinners’ Raises Eyebrows on DSE
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.
Global financial markets took a sharp nosedive on Tuesday as investors grew increasingly anxious about the possibility of another interest rate hike in the United States. Concerns were compounded by worries that these elevated rates might persist to combat stubbornly high inflation.
Despite a brief rebound on Wall Street, early Asian trading saw the dollar strengthen even further, driven by a surge in US Treasury yields to their highest levels in 16 years. This development reignited fears that the world’s largest economy could slip into a recession.
Adding to the uncertainty, lawmakers in Washington struggled to reach an agreement on spending, raising the specter of a government shutdown. This political deadlock prompted warnings that it could negatively impact the US credit rating. The recent surge in oil prices further fueled concerns that central banks’ efforts to curb inflation might be derailed after over a year of tightening measures.
Last week, the US Federal Reserve indicated that it could raise borrowing costs once again before the year’s end. This announcement dealt a blow to many market participants who had hoped that the interest rate hike in July would be the last for a while. Additionally, policymakers hinted that rates might need to remain at their highest levels in over two decades for an extended period.
Market analysts from the BlackRock Investment Institute believe that “rates will stay high” and that Treasury yields could continue to climb. They suggest that rising long-term bond yields reflect the market’s adjustment to increased macro and market volatility. The prevailing sentiment, as noted by National Australia Bank’s Tapas Strickland, is that rates will remain elevated for an extended period, reflecting the Federal Reserve’s stance.
In early Asian trading, major stock markets including Tokyo, Hong Kong, Shanghai, Seoul, Singapore, Sydney, Taipei, and Wellington all experienced declines, reflecting the uncertainty gripping investors. The situation in China’s property sector also raised concerns, with the troubled developer Evergrande announcing that it had missed an onshore bond repayment.
On the currency front, the dollar remained near 11-month highs against the yen, prompting Japanese authorities to express their willingness to intervene if the dollar’s ascent becomes excessive. However, analysts do not anticipate a significant strengthening of the yen, given the Bank of Japan’s commitment to its ultra-loose monetary policy.
The ongoing political standoff in Washington, where hardline Republicans in the House of Representatives have blocked key spending bills, is causing unease among investors. If an agreement is not reached by the weekend, it could lead to a government shutdown, a scenario that Moody’s warns would have negative implications for the US’s top-tier credit rating.
Dhaka Stock Exchange DSE, Bourse on the second working day of the week, September 25, ended with price Index mixed & turnover drops. This information is known from DSE sources.
500 crores 74 lakh shares were traded on this day. 59 crore 46 lakh less trading was done in DSE today compared to the previous workday, 24 September, Shares worth Tk 500 crores 74 lakh shares were traded last time, Sunday.
The benchmark DSEX added 1.84 points or 6,282 The Shariah-based index DSES gained 0.64 points or 1,359, and the blue-chip index DS30 decreased by 1.54 points or 2,135.
Of the issues traded, 82 advanced, 62 declined and 156 remained unchanged.
Khan Brothers PP Woven Bag Industries Limited ranked top gainer on DSE, the share price increased by Tk 2.20 paisa or 8.98 percent. On this day, the share was last traded at Tk 26.70 paisa
Legacy Footwear Ltd ranked top loser on the DSE, the share price dropped by Tk 3.50 paisa or 4.31 percent. On this day, the share was last traded at Tk 77.70 paisa.
DSE topped on trade is Union Insurance Company Ltd 28 crore 66 lakh takas of shares of the company have been traded.
A total of 70 companies’ shares were traded in the Block on Dhaka Stock Exchange, 80 lakh 63 thousand 218 shares of the companies were traded. The financial value of which is 49 crore 96 lakh taka.
Dr. Rumana Islam, Commissioner of the Bangladesh Securities and Exchange Commission (BSEC), has emphasized the need for individuals to invest in the stock market rather than keeping their money stagnant in banks for a year. She pointed out that investing in the capital market is a viable option. Many people consider investing in land, gold, or depositing funds in savings accounts, which she discouraged.
Dr. Rumana made these remarks during a training event for students of Dhaka University’s Law Department held on Sunday, September 24. The event took place at the Kazi Motahar Hossain Building on the university campus and was organized by the DSE Training Academy. Dr. A.T.M. Tariquzzaman, Managing Director of Dhaka Stock Exchange (DSE), was a special guest at the training session.
Dr. Rumana, addressing the students, mentioned that by the year 2041, Bangladesh envisions becoming a highly developed nation, with a significant role for the capital market to play in its economic landscape.
Encouraging students to consider investment in the stock market as a means to grow their savings, Dr. Rumana Islam, Commissioner of the Bangladesh Securities and Exchange Commission (BSEC), highlighted the importance of proactively managing one’s financial future. She advised students to prioritize saving before spending, emphasizing that now is the time to shape their future. Dr. Rumana stressed the significance of making wise investment decisions, stating that if she had the capability to invest one lakh taka, she would risk only fifty thousand taka. In this case, the risk of 50 lakh takas cannot be taken.
During the event, Dr. A.T.M. Tariquzzaman, Managing Director of the Dhaka Stock Exchange (DSE), addressed the students as a special guest. He underscored the need for a robust legal framework to prevent malpractice in the stock market. Dr. Tariquzzaman emphasized that upholding the principles of legality and enforcement is essential for ensuring the security of investors, making it a primary responsibility.
In attendance at the training event, hosted by the DSE Training Academy at Dhaka University’s Kazi Motahar Hossain Building, was the Dean of Dhaka University’s Law Department, Dr. Shima Jaman; Chairman of the Law Department, Prof. Dr. Md Nazrul Islam; and DSE Training Academy’s Deputy General Manager, Syed Al Amin Rahman.
