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Irregular share trading of power grid raises concerns

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Muhammad Ayub Ali :

The state-owned Power Grid Company of Bangladesh, listed on the Dhaka Stock Exchange, has announced that it will not issue any dividends for the fiscal year ending June 30, 2024.

In a statement filed on January 19, the company attributed the decision to financial losses and negative retained earnings, which left it unable to distribute dividends from its reserves.

Following the announcement, the company’s shares were traded without any circuit breaker limits on the same day.

Over 14,000 shares of the Power Grid Company of Bangladesh were traded in the block market at a price nearly three times higher than the public market, sparking significant questions.

Market analysis revealed that the company’s share price closed at Tk 33.30 on January 19, yet shares were traded at Tk 90 in the block market. According to Dhaka Stock Exchange (DSE) data, 14,205 shares were traded in one transaction for Tk 1,278,450.

Addressing the matter, Executive Director Mohammad Rezaul Karim, spokesperson for the Bangladesh Securities and Exchange Commission (BSEC), described the transaction as unusual.

“We have documented the case and are initially seeking explanations from the identified brokerage house, buyers, sellers, or other authorized parties involved in the transaction. If the explanations are unsatisfactory, we will take departmental action,” he stated.

Karim added that the complaint would be investigated step by step, and necessary action would be taken in accordance with regulations.

DSE data showed the share price on January 19 dropped Tk 15.90, making Power Grid Company the day’s top price loser on the DSE. The share price on the previous working day was Tk 39.60. Over the past two years, the stock’s highest recorded price was Tk 53.20.

A senior DSE official speculated that a trader might have transferred shares from one investor’s portfolio to another client, potentially for various reasons. An investigation is expected to reveal the true circumstances.

The company’s financial performance has also been underwhelming. Its loss per share for the last fiscal year stood at Tk 5.10, down from Tk 10.11 in the previous year. Additionally, the financial report for the first quarter of the current fiscal year (July-September 2024) showed a per-share loss of Tk 2.81, compared to Tk 1.42 in the same quarter the previous year.

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