The stock price of newly listed BD Thai Food & Beverage is rising 'abnormally' since its trading debut although there is no undisclosed price sensitive information (PSI).
In the last 12 trading days since its debut, the company saw its share price jumped 239 per cent or Tk 23.90 each riding on speculation and 'irrational hype' among investors.
On Wednesday, the food and beverage producer's share price closed at Tk 33.90 on the Dhaka Stock Exchange (DSE). Its issue price was Tk 10 each.
This 'abnormal' price hike prompted the DSE to serve a show-cause notice on the company on Tuesday.
In response, the company, however, informed the DSE that there is no undisclosed price sensitive information behind the recent unusual price hike.
The company would make it to the top gainers' list almost every day since its trading debut on January 24.
Regular circuit-breakers are also applied to the newly listed company, meaning the price of share could not rise above 10 per cent or fall below 10 per cent in a single day.
Market analysts said the investors continued to show their appetite for the new issue as short-term speculation created an 'irrational hype' among investors since its debut.
Most of the initial public offering (IPO) shareholders were unwilling to sell their stakes hoping for a higher profit in the future, according to a merchant banker.
Each general investor received a minimum 26 IPO shares of BD Thai Food against an application of Tk 10,000 each on a pro-rata basis.
However, an analyst said, investors are blindly chasing its stock without conducting any proper analysis, as they see continuous rise in values.
"If this stock faces correction, general investors will be the ultimate losers, which will hit their confidence," he said.
BD Thai Food & Beverage raised Tk 150 million from the capital market under the fixed price method for purchasing machinery and equipment, land development, building construction and bearing the IPO expenses.
Takaful Islami Insurance is also witnessing an unprecedented price hike and increase in volume of shares despite no undisclosed price sensitive information (PSI).
Within a month, the general insurer's share price jumped 47 per cent or Tk 25.6 each to close at Tk 80.10 on Wednesday.
The company's share price was Tk 54.5 a month earlier on January 10. Its shares traded between Tk 36.80 and Tk 81.50 in the last one year, according to data from the DSE.
Following the 'abnormal' price hike, the DSE served show-cause notice on the company. The company in a knee-jerk response to the DSE query that there is no undisclosed price sensitive information for recent unusual price hike.
Even after being served show-cause notice, the company's share price has not stopped rising and soared 1.14 per cent further on Wednesday.
Some influential investors by disseminating rumours are trying to manipulate the prices of shares of many companies, said an analyst at a leading brokerage firm.
"The investors should also be cautious about buying overvalued stocks in order to avert any misfortune," he said.
Senior executives of the company could not be reached over the telephone.
Listed in 2008, Takaful Insurance's paid-up capital is Tk 425.87 million and authorised capital is Tk 1.0 billion, while the total number of securities is 42.58 million.
The sponsor-directors own 52.34 per cent stake in the company, while the institutional investors own 16.24 per cent, foreign investors 0.08 per cent and the general public 31.34 per cent as on December 31, 2021, the DSE data showed.
