Sonali Aansh plunges 45% on bonus adjustment

Stocks of Sonali Aansh Industries plunged 45 per cent to Tk 434 in a day yesterday, a rare incident for the market. 

Trading of the share had resumed following a record date, the day until which a shareholder has to hold onto a stock to be eligible for that company's dividends.

This made the stock ineligible for its floor price yesterday as per rules.

Floor price is the lowest price at which a stock can be traded, a mechanism set by the market regulator last July to halt the free fall of market indices amidst global economic uncertainties.

For each stock, the floor price was decided taking the average of closing prices on July 28 and the preceding four days.

Hence there was no way to limit the extent of the drop.

The company had earlier announced 100 per cent stock dividend for shareholders for the year ending on June 30 of 2022, meaning the company's total number of shares had increased, said a stockbroker.

Such developments normally lead to price adjustments, he said.

Prior to the dividend announcement, the company's share price had more than doubled, which indicates insider trading had taken place, he said.

The company announced the dividend on November 17. In three months till October 19 the price of the stock had soared 110 per cent to Tk 905.

General investors should not invest in such stocks as their price fluctuations are based on rumours, he said. 

 As the company's paid-up capital is low, some people are targeting such companies as it was easier to manipulate their share prices, he added.

Insider trading is the buying and selling of securities by people who have access to non-public information that may influence the stock value.

The company's earnings per share soared 246 per cent to Tk 3.92 this year while paid-up capital was Tk 2.7 crore, according to the Dhaka Stock Exchange data.