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Stock price of the loss-making Bangladesh Industrial Finance Company (BIFC) has been flying high on the Dhaka Stock Exchange (DSE) without any reason for investors to be inclined to bet on its stock.
The non-bank financial institutions' stock doubled in just two weeks, reaching 18-month high at Tk 12 on Thursday, despite the overall market remaining bearish. Its stock price was Tk 5.90 on May 15.
The scam-hit company is enduring losses for the past seven consecutive years since 2015 and the accumulated losses piled up more than Tk 10 billion until September 2022. However, no financial data was available since then.
All financial indicators of the company such as earning per share, net operating cash flow per share and net asset value per share are negative as per its latest published financial statement for nine months through September 2022.
The company has also failed to declare any dividend since 2014. In 2013, it disbursed a 5 per cent stock dividend for its shareholders last. It had never paid a cash dividend since its listing in 2006.
Despite the grim performance, the stock continued to soar and jumped 9.09 per cent further on Thursday. It was also the week's top gainer as well with more than 46 per cent gain.
The stock has made it to the top gainers' list frequently in recent times even though the firm is still incurring losses.
In absence of any valid reason, the share price hike of the "Z" category company is raising questions and analysts are suspecting price manipulation behind the price jump.
A hike in the share price is unusual considering the current status of the company, as no fundamental changes took place, which could push the company's stocks up, said a leading stockbroker.
He said investors need to be cautious and make their investment decisions based on the company's fundamentals and disclosed information.
BIFC is one of the NBFIs that are the victim of loan scams committed by PK Halder and his associates. They allegedly embezzled around Tk 5 billion from the NBFI.
In an investigation in 2016, the Bangladesh Bank also found former BIFC Chairman Abdul Mannan largely responsible for the institution's financial crisis.
The BB found that Mannan and his family members embezzled Tk 5.18 billion from BIFC between 2005 and 2015 in the form of loans against 53 fictitious companies and individuals. The loans turned sour in 2015.
Currently, a court-appointed board is running the NBFI.
The company's authorised capital is Tk 4 billion and paid-up capital is Tk 1 billion while total number of securities is 100.68 million. Sponsor-directors own 40.55 per cent stake in the company while institutional investors own 40.96 per cent and the general public 18.49 per cent as on October last year.