The recent announcement by the Power Grid Company of Bangladesh (PGCB) regarding its decision not to issue dividends for the fiscal year ending June 30, 2024, raises significant concerns about the health of the state-owned enterprise and the broader implications for investors in the Dhaka Stock Exchange (DSE).
Our newspaper on Friday reported that the company’s financial losses and negative retained earnings have left it unable to distribute dividends, a troubling sign for stakeholders who rely on such returns.
The immediate aftermath of this announcement saw PGCB’s shares traded without circuit breaker limits, leading to a perplexing situation where over 14,000 shares changed hands at nearly three times the public market price.
This unusual trading activity, with shares priced at Tk 90 compared to a closing price of Tk 33.30, has prompted scrutiny from the Bangladesh Securities and Exchange Commission (BSEC).
The BSEC’s commitment to investigate this transaction is commendable, underscoring the need for market transparency and accountability.
However, the circumstances surrounding this trading anomaly raise questions about the integrity of the market and the motivations of those involved.
Investors must be wary of such irregularities, as they can distort market perceptions and lead to misguided investment decisions.
Moreover, PGCB’s financial performance has been lacklustre, with a loss per share of Tk 5.10 last fiscal year and a further decline in the first quarter of the current fiscal year.
These figures paint a grim picture of a company struggling to maintain its footing in a challenging economic landscape.
The stark contrast between the company’s operational struggles and the inflated trading prices in the block market is a red flag that cannot be ignored.
As the BSEC embarks on its investigation, investors must remain vigilant and informed.
The power sector in Bangladesh is vital for the nation’s growth, yet the current state of PGCB serves as a cautionary tale.
Investors must approach the market with a discerning eye, recognising that behind every trading spike lies a complex web of financial realities that could impact their investments.
The situation at PGCB is a reminder of the importance of due diligence and the need for robust regulatory oversight in maintaining market integrity.
As the investigation unfolds, we must say for transparency to restore confidence in Bangladesh’s financial markets.
