Experts have slammed the so-called investors who cannot be restrained from purchasing shares of companies with weak fundamentals at abnormal prices following artificial demand created by the manipulators.
Their criticism came after repeated purchase of shares of companies having weak fundamentals at high prices. The prices also do not match the companies' dividend payouts, they said.
A number of companies with small capital observed abnormal price hikes in first 13 trading days of September last. These companies are still continuing rally amid regulatory measures.
During this period, the share prices rose up to 128 per cent although the companies informed the Dhaka Stock Exchange (DSE) that there was no undisclosed price sensitive information behind the unusual price hike.
"Nobody should have any sympathy for the investors. They still purchase shares of weak fundamentals at abnormal prices again and again even after manipulation," said Yawer Sayeed, managing director of the AIMS of Bangladesh.
He said the Bangladesh Securities and Exchange Commission's rules and regulatory measures are not enough for the investors who jump into the fire.
"The manipulators always come out of the market leaving their followers at bay. It's not new. So-called general investors ignored the manipulators several times and eventually they blamed the regulator," Mr. Sayeed said.
The companies whose prices rose abnormally recently include, among others, JMI Syringes and Medical Devices, CVO Petrochemical Refinery, Al-Haj Textiles, Kohinoor Chemicals, Modern Dyeing, Monno Jute Staffler, Rahim Textile, Desh Garments, Libra Infusions, Savar Refractories, Jute Spinners, Rangpur Foundry, Legacy Footwear, Anwar Galvanizing and Rahima Food.
Former chairman of the BSEC AB Mirza Azizul Islam said the regulator should take measures if the price of a company having weak fundamentals increases by 10 per cent.
"It was not right for the securities regulator to allow the abnormal hike in prices of these companies' shares," Mr. Islam said.
He said after having been cheated by the manipulators, these so-called investors eventually plead for help from the government.
"Investors should not purchase shares following the market's movement. They should invest considering the companies' fundamentals," Mr Islam added.
The BSEC, however, Thursday asked the DSE to submit an inquiry report on the unusual price hike of shares of the companies having small capital.
The BSEC also mentioned the names of such companies.
The companies are: Legacy Footwear, Desh Garments, BD Auto Car, Rahima Food, Information Services, Moono Staffler, Modern Dyeing, Anwar Galvanising, JMI Syringes and Medical Devices, Hakkani Pulp, Intech Online and Alhaj Textile.
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