Junk stocks continued their dominance on the top gainers' chart as four 'Z' category companies featured on Sunday's top 10 gainers' list despite the market kept falling.
Junk stocks have also frequently featured on the top gainers' list in recent weeks, where the heavyweight stocks including blue chips kept sliding.
A company's stocks are termed as junk when its commercial production is shut for six months in a row, fails to arrange annual general meetings on time or fails to provide dividends to shareholders.
Some companies with low-performance records made their way into the top gainers' list of the DSE frequently, riding on a rumour that the investors are putting money in these securities, said an asset manager.
"Low-performing stocks have kept dominance in the gainers' list where renowned companies' stocks are suffering losses which are not a good sign for healthy stock market," he said.
He noted that the influential investors by disseminating rumours are trying to manipulate the prices of shares of many low-profile companies in the falling market to make quick profit.
He said the investors are chasing these stocks without conducting any proper analysis, as they see a continuous rise in values.
"If these stocks face corrections, investors will be the ultimate losers," he said, adding that the investors should be careful about buying junk stocks in order to avert any misfortune.
Among the junk stocks, Meghna Condensed Milk posted the highest gain of 9.82 per cent to close at Tk 43.60 on Thursday.
In the last month, the share price of the company jumped 50 per cent while the company's share doubled in the last three months despite the company incurred huge losses and not giving dividends for a long time.
The company has reported a net loss of Tk 85.44 million in nine months for July 2021 to March 2022 as against loss of Tk 84.22 million in the same period of the previous year.
Besides, Meghna Condensed Milk incurred a net loss of Tk 132.17 million for the year ended on June 30, 2021 while the company's liabilities exceeded its total assets by Tk 442.14 million.
The scam-hit FAS Finance was the second highest gainer on Sunday, soaring 9.80 per cent to close at Tk 5.60 each.
The non-bank financial institution's share jumped 15 per cent in a month.
Stock price of another scam-hit company-International Leasing & Financial Services- also rose 9.80 per cent, becoming the third highest gainer. Its share closed at Tk 5.60 each.
The 'Z' category First Finance was the fourth highest gainer, soaring 9.61 per cent to close at Tk 5.70. The company also failed to declare dividend since 2019.
Share price of Meghna Pet Industries, another junk stock, also rose 8.95 per cent to close at Tk 42.30 on Sunday. Its share soared around 20 per cent in a month despite the company did not pay any dividend for a long time.
Fareast Finance --- another junk stock --- also jumped 8.93 per cent to close at Tk 6.10. The company also failed to declare dividend since 2016.
Safko Spinning's stock also rose 7.42 per cent, Union Capital 7.14 per cent, Metro Spinning Mills 6.41 per cent and Progressive Life Insurance's stock also soared 6.38 per cent on Sunday.
