S Alam Steels stock prices jump 72pc in seven days despite business woes

S Alam Cold Rolled Steels, owned by the embattled S Alam Group, has seen its stock price surge dramatically on the Dhaka Stock Exchange (DSE), despite its ongoing business challenges.

In just seven trading days, the steel-maker's stock has jumped 72 per cent to Tk 16.90 on Sunday. This increase comes amid no clear catalyst for such a rise, raising concerns among market analysts.

Nowadays, the company has been grappling with frozen bank accounts, restricted access to letters of credit, and a lender's move to auction its mortgaged assets amid recent political unrest.

Despite these setbacks, its stock continued its upward trajectory, gaining 9.74 per cent on Sunday to become the day's top performer. The company was also the leading gainer last week by posting a 57 per cent increase.

Such an unusual price movement prompted the prime bourse to serve a show-cause notice to the company authority, enquiring about the reasons behind that.

However, the company returned a knee-jerk response on Sunday, saying there was no undisclosed price-sensitive information.

Analysts said that speculative trading and the price manipulation was the major reason behind such an "abnormal" share price surge.

"The stock price hike of the company's stock is unusual considering their current status," said a leading stockbroker.

DSEX EDGES UP

The benchmark equity index closed higher on Sunday as bargain hunters continued taking positions in the sector-specific shares in anticipation of quick gains.

The key DSEX index of the Dhaka Stock Exchange (DSE) kicked off the week on a positive note, settling 23.99 points higher at 5,224.37.

The recovery of the DSEX was driven by active participation in large-cap stocks amid growing anticipation over upcoming corporate announcements, while opportunistic investors pursued trendy stocks, expecting robust market activity ahead of Ramadan, said EBL Securities in its analysis.

The blue-chip DS30 index, a group of 30 leading companies, also gained 11.16 points to close at 1,921.06, while the DSES Index, representing Shariah-compliant companies, inched up by 3.19 points to 1,166.10.

Turnover, a crucial indicator of the market, stood at Tk 4.88 billion, up 4.70 per cent from the previous trading day.

The majority of the stocks saw their prices gain, as out of the 398 issues traded, 217 closed higher while 124 ended lower and 57 remained unchanged on the DSE trading floor.

Grameenphone was the most-traded stock with shares worth Tk 231.33 million changing hands, followed by Orion Infusion, Fu Wang Food, Malek Spinning Mills and Robi Axiata.

The Chittagong Stock Exchange (CSE) also ended higher, with its All Share Price Index (CASPI) rising 16.1 points to settle at 14513 and the Selective Categories Index (CSCX) gaining 9.9 points to close at 8803.9.

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