Sonali Paper and Board Mills is witnessing an inexplicable rise in its share value and as a result, the company’s stocks are trading at an abnormal level, according to analysts.
Sonali Paper’s trade volume at the Dhaka Stock Exchange (DSE) was worth about Tk 153 crore yesterday while the company’s total paid-up capital was Tk 21 crore.
The low paid-up capital based company’s trading accounted for 17 per cent of the DSE’s total turnover, which stood at Tk 885 crore.
In a recent disclosure, Sonali Paper had announced that one of its directors planned to sell his shares.
Mohammad Javed Noman, the directors in question, then reported that he completed the sale of one lakh of his shares in the company at the prevailing market price.
“How a company like Sonali paper, whose paid-up capital is just Tk 21 crore, can lead the DSE’s total turnover is beyond me,” said a top official of a merchant bank preferring anonymity.
“The trading just seems abnormal and so, the market regulator should investigate it,” he added.
Sonali Paper was transferred from the over the counter market to the main board on July 26, 2020.
Since then, the company’s stock rose 188 per cent to Tk 855 as of yesterday.
The stock price is among the top 15 highest priced stocks listed on the DSE and follows just after some multinational companies like Reckitt Benckiser, Unilever Consumer Care, Marico, Berger Paints, Linde Bd, Libra Infusion, and Bata Shoe.
“When Sonali Paper gained a spot in the list of top priced stocks, it became clear that some players are fuelling the rise in stock price,” a stock broker said.
Sonali Paper distributed 20 per cent cash and 20 per cent stock dividend for its performance in the period of 2020-21.
Institutional investors and sponsors are reducing their stake in the company while general investors are going in the opposite direction.
General investors collectively held a 24.80 per cent stake in the company as of June 30 but that amount has since edged upwards to 27.2 per cent as of November 30, DSE data shows.
However, sponsor shareholding fell to 71.51 per cent from 72.06 per cent while institutional shareholding downed to 1.26 per cent from 3.14 per cent at the same time.
“Investors buy stocks on the basis of their own analysis and the demand-supply situation. So, we cannot say anything about the stock prices,” said Mohammad Rezaul Karim, spokesperson of the Bangladesh Securities and Exchange Commission.
Some investors trade in higher volume to attract general people; the BSEC’s surveillance team will see if there is any unlawful trading or wrongdoing, he added.
