Zaheen Spinning stocks fly high on rumours
The share price of Zaheen Spinning Mills is skyrocketing on the Dhaka Stock Exchange despite a fall in its profits, largely riding on rumours.
The spinner’s stocks rose 72 percent to Tk 10.1 in the last eight trading days, according to DSE data.
Market insiders say a vested quarter is spreading rumours that the stock would rise as there is some price-sensitive information about Zaheen Spinning Mills.
The price is rising fast as the rumour has pulled many general investors to the stock, they said.
Md Faruq Hossain, chief financial officer of Zaheen Spinning Mills, however, said the company has no price-sensitive information or news that can push its prices up.
“Market stakeholders can say why the price is rising. We don’t know the reason,” he told The Daily Star on Tuesday.
The spinner’s earnings per share fell 64 percent to Tk 0.10 year-on-year in the first quarter of the current fiscal year, DSE data showed. Hossain said their cost of production rose due to higher prices of energy, which brought down the company’s production and earnings.
“We are facing problems because of low pressure of gas and a shortage of electricity.”
The company’s earnings also fell in the last quarter of fiscal 2018-19. Its dividend halved in the year.
In November, the spinning mill declared 5 percent stock dividend for the last fiscal year, the lowest in four years and down from 10 percent a year ago.
The fall in the dividend payment below 10 percent will drag it down to “B” category share from “A” now. Its trading also halted on some occasions in the last eight days as there was no seller of the stock.
Saifur Rahman, spokesperson of the Bangladesh Securities and Exchange Commission, said the company is under the scanner. “If anyone is found to be breaching rules in order to push up the stock’s price, we will take steps.”
The company’s stock prices moved between Tk 4.90 and Tk 13 in the last one year.
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