Nine shares downgraded to 'Z' category | The Daily Star
12:00 AM, January 18, 2019 / LAST MODIFIED: 12:00 AM, January 18, 2019

Nine shares downgraded to 'Z' category

Nine listed companies were downgraded to “Z” category in 2018 because of their poor performance, which inflicted losses on the retail investors who are holding their shares.

The companies are Emerald Oil Industries, Tung Hai Knitting & Dyeing, Fareast Finance & Investment, AB Bank, Eastern Cables, Padma Islami Life Insurance, Evince Textiles, Northern Jute Manufacturing Company, and GBB Power.

They were downgraded for failing to recommend dividends, remaining out of operation for more than six months, or failing to hold annual general meetings (AGMs).

GBB Power, Northern Jute and Evince Textiles did not recommend any dividend for the year that ended on June 30, 2018.

Padma Islami Life Insurance, AB Bank, and Fareast Finance & Investment did not announce dividend for the year that ended on December 31, 2017.

Tung Hai Knitting and Emerald Oil were downgraded to junk stocks for their failure to hold AGMs in 2017.

Eastern Cables was placed in the “Z” category from the “A” category after it failed to hold AGM within 45 working days from the record date. The company has not sought permission from the securities regulator to hold the AGM after the 45 working days from the record date.

A merchant banker said the stock investors of the downgraded companies lost in two ways. Firstly, they did not get any dividend and secondly, these stocks mostly fell after the downgrade.

He said some companies might be downgraded to the “Z” category for bad performance, but downgrading for not holding AGMs was not acceptable. “Two companies were downgraded from the financial sector, which is very concerning.”

At present, the number of “Z” category companies listed with the stock exchanges is 44.

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