4 new pawns for stock gamblers

Four small capital-based companies which have returned from the over-the-counter (OTC) market have been turned into new pawns by gamblers in Dhaka Stock Exchange (DSE).

The stock market regulator allowed Bangladesh Monospool Paper Manufacturing Company, Paper Processing and Packaging, Tamijuddin Textile Mills and Monno Fabrics to return to the main market and their trading started a week ago.

Soon after getting listed in the main board, the stocks started taking abnormal leaps although their financial performance is not that better than many other listed companies of the same price.

Furthermore, when the bourse wanted to know whether they had any reason for it, they informed to have no undisclosed price sensitive information.

The Monospool's stocks rose 134 per cent to Tk 129 in a span of eight trading days.

Meanwhile, the Processing's stocks advanced 133 per cent, the Tamijuddin 132 per cent and the Monno 132 per cent.

Market analysts believe the basis of the rise are solely rumours and gamblers were picking such companies as it was easy to manipulate those with a low paid-up capital.

The Monospool has a paid-up capital of Tk 3.2 crore, the Processing Tk 3.73 crore and the Tamijuddin Tk 30 crore.

The sole exception is the Monno, whose paid-up capital is Tk 115 crore.

Since there were small and medium enterprise (SME) boards at both the Dhaka and Chattogram bourses, the low paid-up capital-based companies could have been allowed there so as to prevent gamblers from playing with those.

So, stock market analysts were curious as to why the regulator decided to allow the four at the main board.

Their rising patterns were also not in tune with their performance.

The Monno provided no dividends for shareholders in recent years, showed the DSE data.

Its earnings per share (EPS) was Tk 0.04 in the nine months period of the current fiscal year (July of 2020 to March of 2021) as against Tk 0.06 in the same period of the previous year.

Meanwhile, the Monospool provided 9 per cent cash dividend and its EPS dropped 94 per cent year-on-year to Tk 0.28 from Tk 5.06.

Cash dividend of the Processing was 11 per cent for last year while its EPS was downed 87 per cent year-on-year to Tk 0.44 from Tk 3.53.

The Tamijuddin provided 10 per cent cash dividend. Its EPS rose to Tk 0.98 from Tk 0.81.

The EPS of three dropped, which was over 80 per cent for two, while that of one was less than Tk 1, explained a top official of an asset management company preferring anonymity.

A stock price surge of over 130 per cent is not financially logical, he said, adding, "This is totally absurd."

The regulator should monitor them, he said, adding that their inclusion helped some people get new items to gamble with.

Some of the returnees could be sent to the SME board and the rest kept at the main board, he added.