CSE DSE Stockmarket Sharebazar Pujibazar taka stockholder investor PSI
Aziz Pipes is one of the many companies that have not explained why its earnings had a sharp deviation between FY22 and FY23, in breach of listing regulations.
There is a specific provision that makes it mandatory to publish reasons behind an increase or decrease in profit and other financial indicators with periodic disclosures. But a significant number of listed firms have shown reluctance to comply, and that has been in practice for years.
Alongside publishing financial data in newspapers and on their websites, companies must post quarterly information on the online portal of the stock exchanges. The bourses are also bound to make sure all the listed securities provide data on time and in the due manner.
In a stock exchange filing, Aziz Pipes reported a loss of Tk 6.87 per share for FY23, as opposed to earnings per share of Tk 4.54 for the previous fiscal year. Neither did it bother to provide any clarification on the DSE website, not did it do so on its own website.
Annual financial reports are published at the end of a year or after the fourth quarter. That is the reason why the mandatory provision was put in place not to make investors wait for price sensitive information (PSI) for that long.
Disclosure of PSI on the website of the bourses is very important for price discovery of the listed securities, said Managing Director of Midway Securities Md. Ashequr Rahman.
The Dhaka exchange might have a shortage of manpower to post PSI disclosures.
"I think the listed companies should have access to the DSE website so that they can upload their information. In that case, they will be responsible for posting wrong information," Mr. Rahman added.
When attention was drawn to the matter, DSE Chief Operating Offer M. Shaifur Rahman Mazumdar said the bourse would have to crosscheck to learn if any violation of the provision tied to price sensitive information had happened.
There are many examples of non-compliance though.
Earnings data of Hakkani Pulp & Paper Mills were available on the DSE website but without any explanation.
Officials of the company, however, said it had sent PSI to the stock exchange, citing reasons for deviation.
Nahee Aluminum Composite Panel endured a steep 260 per cent year-on-year fall in profit in FY23. But the company’s disclosure posted on the DSE website skipped an explanation. Its own website also missed the details.
CVO Petrochemical Refinery turned into a profit-making company in FY23 after suffering a loss of Tk 3.31 per share in the previous fiscal year. It also did not mention how the transformation happened.
Similarly, Safko Spinnings Mills, Indo-Bangla Pharmaceuticals, FAS Finance & Investment, and Midas Financing are among the companies that have not let investors get details about their business performance.
It takes time for a listed company to publish an annual report or financial statement because of the obligation to meet some regulatory requirements.
Just after the board approvals, the listed companies are to disclose the recommended dividends, EPS, net asset value and operating cash flow through newspapers and the websites of their own and the stock exchanges.
Shareholders look at those data to evaluate the performance of a company ahead of any investment decision, which gets difficult if there is no clarification given on any deviation in financial indicators.
Moreover, not many investors have enough financial literacy to decipher annual reports.
On the matter of non-compliance, the spokesperson of the Bangladesh Securities and Exchange Commission, Mohammad Rezaul Karim said the regulator’s usual practice was to seek explanations from companies on unusual ups or downs on the business trajectory.
"The regulator takes action if the explanations are not satisfactory," Mr. Karim added
The Financial Express