Experts questions Far East Knitting’s 35% rise in share price in a day
Experts expressed worries today when the share price of Far East Knitting & Dyeing rose around 35 per cent in a single day after the company recommended 10 per cent cash dividend for its shareholders.
The company's 1.91 crore shares changed hands today and the price of its shares soared to Tk 24.10 from the day's opening price of Tk 17.90.
"Some manipulators must have been there behind the scene to fuel it to go so high," said a top official of a merchant bank, preferring anonymity.
Normally a stock is not allowed to rise by more than 10 per cent in a day and there remains no circuit breaker for a stock on the day it issues its disclosure, he said.
Manipulators take benefit of Far East Knitting as it issued its disclosure today, he added.
"The company did not show any miraculous performance in recent times, which may cause the share price to increase so much. It is clearly a case of manipulation," said the merchant banker.
The knitting company's earnings per share was Tk 0.79 in the end of the last financial year that ended on June 30 of 2021.
Giving examples of some banking stocks, he said there are many other well-performing stocks whose prices are below than that of Far East Knitting.
The stock market regulator should investigate whether there was any manipulation, he said.
A stock broker echoed the same saying the stock rose riding on a rumour that the manipulators are buying the share.
So the general investors went for buying the stock and the day was chosen to take benefit of the absence of a circuit breaker in its share price rise, he said.
"The rise of Far East Knitting astonished me also," a top official of Bangladesh Securities and Exchange Commission told The Daily Star, requesting anonymity.
"Actually, investors will have to be cautious. We will find out whether the rise breached any trading rules. But if anyone buys stocks on speculation, we have nothing to do."
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