The Financial Express

Price surge of two large-cap stocks draws DSE notice

| Updated: October 06, 2021 12:53:01

Price surge of two large-cap stocks draws DSE notice

Two large-cap stocks from Beximco and LafargeHolcim are witnessing an unprecedented price surge and increased volume of trading in recent times, inviting the Dhaka Stock Exchange (DSE) notice for explanation.

Market sources said their bullish trend went on unrelentingly sans undisclosed price-sensitive information (PSI).

The local big shot and the multinational have also dominated the top turnover list of the DSE in the recent weeks amid an influx of buyers and sellers in the market.

Share price of Beximco -- the flagship company of Beximco Group --jumped about 29 per cent within a month to close over two-year high at Tk 148.30 on Tuesday.

The miscellaneous-sector company's stock price also more than doubled within six months. The company's share price was Tk 74.20 six months back on April 6.

Following the 'abnormal' price hike and increase in volume of shares, the DSE Tuesday served show-cause notice on the company.

The company, however, in a prompt response, informed the DSE that there is no undisclosed price-sensitive information for recent unusual price hike and increase in traded volume of shares.

Even after the show-cause notices, the company's share prices didn't stop upswings on Tuesday as the Beximco stocks saw further price rise by 1.64 per cent on the day.

Earnings per share of Beximco (Bangladesh Export Import Company), which is engaged in power, textile, holdings, IT, healthcare business - have posted an impressive growth in the past nine months.

Its nine-month earnings per share (EPS) rose by 551 per cent to Tk 4.30 for July 2020-March 2021 period as against Tk 0.66 for July 2019-March 2020.

"Investors are thinking that the company may declare higher dividend this year as it is making higher profit than that of the previous years," said a stockbroker about the bait behind the bets.

He noted that the concerns of Beximco Group have led the market from the front in the past few months, amid a bull run of the bourse.

Meanwhile, Beximco is in the process of raising Tk 30 billion by issuing Sukuk Bond and the proceeds will be used for implementing the solar projects of Teesta Solar and Korotoa Solar to produce electricity from renewable energy and transmit into the national grid.

The company will also utilise the proceeds for expansion-project financing and refinancing (non-interest bearing) of the textile machinery for expansion of the textile division of the Beximco.

Recently, the Bangladesh Bank allowed banks to invest the entire permitted special funds in asset-backed green Sukuk, including Beximco's Tk 30-billion Sukuk.

The central bank's directive came at a time when the country's maiden Sukuk -- Beximco Green Sukuk -- was struggling to attract investors.

Of the Tk 30 billion Sukuk, Tk 7.50 billion is supposed to be raised through initial public offerings. But, even after the expiry of the three deadlines for the Sukuk's IPO, the subscription reached only 8.02 per cent.

However, the subscription to the Sukuk through private placement will continue until January 2022.

However, dividend payout of Beximco was not encouraging for many investors. Beximco disbursed 5.0-percent cash dividend each for the past two years -- 2019 and 2020.

Within a month, the stock price of LafargeHolcim Bangladesh also jumped about 40 per cent or Tk 25 each to close at Tk 105.70 on Tuesday.

It was more than two-year highest closing price of the company's share.

The multinational cement manufacturer's share price more than doubled within the six months. Its share price was Tk 48.80 six months earlier on April 6.

The cement maker's shares traded between Tk 31 and Tk 107.40 in the last two years, the DSE data showed.

The stockbroker said the cement-sector stocks continued to rally over the past few weeks amid growing demand for the key construction material as the economy is rebounding fast.

The cement sector also saw a phenomenal gain of 12 per cent in the outgoing week, backed by the sector-heavyweight LafargeHolcim.

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