Shares of 22 cos downgraded in‘Z’ category

Market faces huge volatility

Staff Correspondent : The Dhaka and Chittagong Stock Exchanges (DSE and CSE) on Sunday downgraded the shares of 22 listed companies from the previous ‘A’ or ‘B’ category to the ‘Z’ category. Due to this, at the beginning of trading at 10 am, the price of these shares fell sharply. Shares of at least 19 companies were seen trading at circuit breaker-set lows for the day.
At least 11 of these shares were seen being traded at such a rate at the end of the first hour of trading, where there were no buyers against orders to sell a large number of shares.
This change was made after various dramas and controversial decisions. There is still a storm of controversy and criticism about this.
The decision was taken on the basis of the order given by the regulator BSEC last Thursday night after two rounds of changes, the stock exchange authority said.
Shares that have been downgraded to ‘Z’ category are – Alltex, Aramit Cement, Aziz Pipes, Delta Spinners, FAS Finance, GBB Power, Intake Online, International Leasing, Kaya Cosmetics, Khulna Printing, National Tea, Premier Leasing, Regent Textiles, Renwick. Yajneshwar, Ring Shine, Safco Spinning, Standard Ceramics, Dhaka Dyeing, Union Capital, Uttara Finance, Yakin Polymers and Zahintex.
These companies are classified in ‘Z’ category for one or more reasons such as non-holding of AGM on time or suspension of production or business of the company for more than six consecutive months or accumulated losses exceeding the paid-up capital of the concerned company.
A listed company is included in ‘Z’ category even if it fails to pay regular dividend to the shareholders.
Last Thursday’s order by the regulatory body BSEC directed the immediate downgrade of the concerned company to ‘Z’ category for non-payment of dividend for two consecutive years.
However, BSEC has not allowed any company to be included in ‘Z’ category for dividend issue.
The BSEC did not respond to the question as to why it was allowed to follow the fragmentary part of the same order, but not the rest.
Saiful Islam, president of Dhaka Stock Exchange’s brokers’ organization DBA told, “If there is no stability in the policy-decision and if it is not long-term, the investors of the stock market will suffer. Any policy should be carefully considered. No law should be made in such a way, it should be changed immediately.’’ He also commented that the investors are annoyed by the arbitrary use of the law and the stock market is diverted.
Shares marked as ‘Z’ category in the Bangladesh stock market are basically considered as junk or bad quality shares.
Listed companies hold regular AGMs and have paid at least 10 percent or more of dividend through the last AGM, they are identified as A category shares. Those that have paid less than 10 percent of the last dividend are included in the ‘B’ category.
Meanwhile, at the end of the first hour of trading today, at 11:00 am, most of the shares traded in the main stock market DSE were seen to be bought and sold.
At that time, the share price of 195 companies was increasing. 126 were trading at a loss and 54 were trading at unchanged rates.
The DSEX index rose by 9 points to 6345 points due to higher trading in most of the shares.
Shares worth Tk 314 crores were traded in the first hour of trading today. Shares worth Tk 285 crore were traded at the same time last Thursday. In other words, in the first hour today, about Tk 30 crores worth of shares have been bought and sold.
Stock-wise transaction analysis showed that most of the insurance sector shares (56 out of 58) were trading higher after the first hour.
At this time, the shares of Central and Crystal Insurance were seen trading at the highest price set by the circuit breaker of the day.
Apart from this, 14 shares of the food and related sector are trading at a loss against 14 shares. All other sectors were mixed.
The insurance sector was at the top with 15 percent transactions in the first hour. Pharmaceuticals and chemicals sector followed with 13 percent of transactions.