BBS Cables, which was listed on July 31, saw unusual jump in its share price because of insider trading, said one of its top executives.
“Some of my relatives bought 2.5 lakh shares to book profits,” said Abu Noman Howlader, managing director of BBS Group, while addressing a seminar yesterday on the role of capital market in industrialisation.
Online financial newspaper Arthosuchak organised the seminar as part of its three-day Bangladesh Capital Market Expo 2017, which ended yesterday.
BBS Cables, a sister concern of Bangladesh Building Systems Ltd, started its share trading on the Dhaka Stock Exchange (DSE) on July 31, with each share of Tk 10 trading at Tk 90 on the inaugural session.
The share price continued its upward trend and hit Tk 156 on August 28.
The unusual price hike prompted the Bangladesh Securities and Exchange Commission to form an investigation committee -- just less than a month after the company started trading.
“Even the manager of the company made profit from BBS Cables stocks,” Howlader said, adding that company insiders bought shares due to a lack of knowledge about stockmarket rules.
In response to queries from the investigation committee, BBS Group informed about the share purchase by the company insiders. It also committed to never buying shares from the secondary market again.
Howlader went on to warn investors about the rumour that the share price will go up to Tk 250.
“I heard a rumour that owners of the company will take the share price up to Tk 250 very soon, but this is absolutely incorrect.” “We have lack of knowledge about the stock market rules and regulations and I am trying to learn more about the market to avoid violation.” BBS Cables traded at Tk 119.30 at the last trading session last week, according to the DSE.
Established in 2009, BBS Cables went on to cement the number two position in the cable business in 2015, according to Howlader. The company has plans to step into the global market, he added.
Investors should invest in stocks after knowing about the business of respective companies, said Syed Farhad Ahmed, managing director of Aamra Group, which has two companies listed on the DSE: Aamra Technology and Aamra Network.
He also advised investors to make an effort to know about the company's vision before buying its stock.