Home National Khan Brothers’ stock more than doubles in a month

Khan Brothers’ stock more than doubles in a month

by fstcap

The stock price of Khan Brother PP Woven Bag Industries has more than doubled in just one month to Thursday on the Dhaka Stock Exchange (DSE) although there is no valid reason for investors to be keen on betting on it.

The loss-making company is suffering from a severe working capital shortage, now surviving on subcontract work, while losses piled up to Tk 47.74 million in the past four consecutive fiscal years.

Khan Brothers is also among the 14 companies the DSE is inspecting with a view to exposing their real condition to the investors, as some are not in operation and even not making any information public.

Despite the grim performance, the stock of Khan Brothers has continued to soar since October 25 and jumped 8.97 per cent further on Thursday to close at Tk 68, becoming the day’s fourth top gainer.

The stock has made it to the top gainers’ list frequently in recent times even though it incurred a loss of Tk 0.98 million in the first quarter of FY’24.

Khan Brothers has remained in the ‘B’ category for several years now as it has failed to pay dividends more than 5 per cent since 2017.

It jumped an astounding 117 per cent in a month. Last week, the company declared ‘no’ dividend for FY’23.

The unusual price movement prompted the prime bourse to serve show-cause notices to the company several times, enquiring about the reasons behind that. But the company replied that there was no undisclosed price-sensitive information.

Contacted, Company Secretary Tapan Kumar Sarker himself expressed surprise at the inexplicable price surge, saying they have no undisclosed price sensitive information which might influence the stock price movements.

He said the company’s business was seriously affected by the pandemic when it did not receive any orders from foreign buyers.

Its management is now trying to continue partial operation to supply its products to local businesses.

The share price surge even amid the ongoing inspection is raising questions as market analysts suspect that price manipulation is behind the price surge.

The company’s stock is rising mainly due to some rumours that its value will increase further, said a leading stockbroker.

A vested group that does not care about the companies’ actual performance is targeting such firms having a low number of stocks for price manipulation, he said.


source: thefinancialexpress.com.bd



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