The stock price of Modern Dyeing& Screen Printing Limited has eroded by 15.35% to Tk83.3 each on Dhaka Stock Exchange last week.
DSE on Tuesday placed the company in the “Z” category of shares from the “B” category effective since Wednesday, as the company failed to continue operations for more than last six months.
The decision was taken in accordance with securities laws.
Shares worth Tk4.57 lakh that represented exchange of 4,950 shares were traded during the last week.
The turnover last week was an insignificant amount, however, in the first week of December – volume traded was 18,250 and 9,900 respectively.
Previously, a team of DSE visited the factory premises and head office of Modern Dyeing & Screen Printing Limited for inspection.
The team in September reported the company’s production remained closed since January 31, 2010 and all the machineries have been sold out during the time of lay-off, beginning from January 31, 2010.
Moreover, according to DSE, the factory premises have been leased out on rental basis to third party as per the resolution passed in EGM held on August 03, 2010.
On the contrary, the company has been paying cash dividend to its shareholders ranging from 4% to 8% in the past 14 years, except for 2010 and 2011.
Brokers said the news influenced the stock price to fall which resulted in the stock’s low volumes of trading.
Nevertheless, a non-operational company’s shares each having a net asset value of Tk10.37 was being traded surprisingly at Tk100 each, said a broker. The face value of the stock is Tk10 each.
In a recent disclosure, the company announced its first quarter profit in the current fiscal year of Tk4.9 lakh nearly 23.4% lower than Tk6.4 lakh in the same period last fiscal.
The company currently runs on the rental revenue of around Tk20 lakh quarterly with an expense of around 60% of the revenue, according to the first quarter unaudited report at the end of September.
Long term asset is worth Tk2.9 crore, a part of which is generating a lump of Tk80 lakh rental revenue annually.
The stock price ranged between Tk107.9 and Tk83.3 each in last one month. The company listed in the textile segment of the stock market has an EPS of Tk0.36 and a price to earnings ratio of 57.85, according to unaudited reports.