Regulator to probe Hakkani Pulp's unusual price hike

The stockmarket regulator has formed a panel to investigate unusual hikes in the prices of shares of Hakkani Pulp and Paper Mills.

The panel consists of two deputy directors of Bangladesh Securities and Exchange Commission: Mohammad Golam Kibria and Mohammad Shamsur Rahman.

They will submit the investigation report to the regulator in a month.

The share prices of the Chittagong-based paper maker, which was listed in 2001, trebled in just one month.

The price remained stable on Thursday, but started increasing again yesterday in continuation with the last one month's trend and stood at Tk 59.5 per share on the Dhaka Stock Exchange.

But the company's share prices never crossed the Tk 45-mark in the last two years. The sudden rise in prices attracted attention of many and prompted the regulator to go for an inquiry.

Hakkani Pulp dominated the top gainers' chart most of the days in the last two weeks and became the second best performer yesterday with a 9.98 percent rise.

On April 30, the company announced a plan to produce various types of tissue paper under a Tk 16.5-crore project to be financed by banks. Its share price started rising after a month of the announcement.

The company disclosed another plan on June 14 to upgrade its effluent treatment plant with its own fund of Tk 1.47 crore.

On the same day, it also disclosed that Social Islami Bank's Agrabad branch has approved a loan of Tk 42.25 crore to implement BMRE (balancing, modernisation, rehabilitation and expansion) and the tissue paper project.

Its production capacity will be raised by about 60 tonnes a day, Hakkani Pulp said in a notice on the DSE website.

After three days, the company again said the tissue paper project would go into commercial production in July 2016. Hakkani Pulp also said another project to produce writing, printing and glossy paper would take off in July 2017.

The company gave 5 percent cash dividends for 2014 after making a net profit of Tk 76 lakh.