Share price of Samata Leather soaring despite capital shortage
Jumps 38pc in five trading days
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The share price of Samata Leather Complex, a "Z" category company, is soaring despite the company facing shortage of working capital.
In five trading days, the share price jumped nearly 38 per cent or Tk 14 each to reach at Tk 49.60 on Tuesday.
Samata Leather is one of the 15 companies which are now under the scanners of Dhaka Stock Exchange (DSE) due to failure in declaring dividends for the last five years.
Following the recent abnormal price hike of the company's share, the DSE served show-cause notice on the company.
The company informed the DSE on Tuesday that they have observed unusual trends of share price of the company recently in the stock market.
"Our company couldn't be able to achieve any financial development because the company is still facing shortage of working capital," said the company through DSE website.
The company noted that the company is still passing its shifting and construction process at Hemayetpur in Savar.
"We have no decision or resolution that may change the share price abnormally," said the company.
The company's earnings per share (EPS) was minus Tk 0.054 for January-March 2018 as against minus Tk 0.027 for January-March 2017.
In nine months for July 2017-March 2018, the EPS was minus Tk 0.036 as against minus Tk 0.065 for July 2016-March 2017.
The "Z" category company, which was listed on the Dhaka bourse in 1998, failed to pay dividend over the years.
The company's paid-up capital is Tk 103.20 million and authorised capital is Tk 500 million, while the total number of securities is 10.32 million.
The sponsor-directors own 50 per cent stake in the company while the institutional investors own 4.85 per cent and the general public 45.15 per cent as on July 31, 2018, the DSE data shows.
An analyst said that even after serving the show-cause notice, the prices of the company continued to rise, which might hit the investors.
He said investors should be careful before investing in junk stocks.
"Otherwise investors will have to accept losses as they willingly buy junk stocks knowing that these companies do not have bright future and do not give dividends over the years," he added.
Recently, the prime bourse DSE delisted two companies-Rahima Food Corporation and Modern Dyeing and Screen Printing-for remaining closed for three years.
About Tk 500 million of general investors' money got stuck due to the delisting while the investors were in the dark about getting back the money, market insiders said.