AB Bank shares suddenly in demand despite losses in Q3

AB Bank's shares were suddenly in demand yesterday although the private commercial lender incurred losses in the third quarter.

The bank was the most traded shares on the Dhaka Stock Exchange yesterday with securities valued nearly Tk 86 crore changing hands. AB was one of the top gainers as it rose 6.72 percent.

The bank advanced Tk 1.6 to close at Tk 25.40, the highest since April 4, according to the DSE.

The bank is trying to mobilise capital through issuing rights share which may have a positive impact on its stocks, said a senior executive of AB Bank.

The board of the bank decided to issue two rights shares against three existing ordinary shares and is expected to get the approval from the Bangladesh Securities and Exchange Commission (BSEC).

The decision will be approved at an extraordinary general meeting scheduled to take place today.

In July, the bank submitted a proposal to the stockmarket regulator, seeking permission to offer four rights share against five existing shares at a price of Tk 10 but the BSEC authorities did not give consent.

Under these circumstances, the bank revised its proposal and expects that it will now get approval, said the executive of AB Bank.

AB Bank incurred a loss of Tk 11.45 crore in the third quarter this year, in a reversal of a profit of Tk 25 crore it made in the same period last year.

The loss was due to squeeze in business activities as it could not raise capital, according to the bank.

The bank reported negative earnings of Tk 0.17 per share in the July-September period although it was in the positive at Tk 0.37 in the same period last year, according to the DSE.

Daily Market:

The market closed in green yesterday riding on large cap shares. The broad index, DSEX, gained 12.2 points to close at 6,319.1.

Banking shares mostly dominated the turnover list generating daily turnover of Tk 1,158 crore, up 19 percent from the previous session.

A merchant banker said retail investors are injecting funds in banking stocks considering the third quarter earnings report.

He said some business groups are purchasing shares of some banks to take directorship in the boards, leading to huge turnover of the stocks in the category.

LankaBangla Finance, Dhaka Bank, Square Pharma, Shahjalal Bank and City Bank were among the highest traded shares.