The onward march of Shahjibazar Power Company Limited (SPCL) with its stock price increase has finally been resisted.
The securities regulator’s move drove away buyers and reigned in the company share price.
The downfall of the company’s share price comes a day after the Bangladesh Securities and Exchange Commission (BSEC) put a number of trading restrictions on it, aiming to restrain the abnormal price hike without any fundamental reason.
Its abnormal behaviour is also currently under the regulator’s investigation.
The small-cap power generation company that never fell since its debut about four months back witnessed no buyers yesterday at the stock exchanges, dragging down its share prices by 8.73% to Tk309 a share in the spot market.
Before witnessing forcible correction, it rose more than 1,200% on on its offer value of Tk25 a share since its debut on July 15 last.
“Regulator’s move might bring it down,” said Md Moniruzzaman, Managing Director of IDLC Investments Ltd.
On Tuesday, the BSEC declared the issue as non-marginable securities with effect from yesterday and shifted it from the main market to the spot market.
The regulator also asked the brokerage firms that have already exceeded single exposure limit in share transaction of SPCL to bring down the limit within the three trading days.
Every brokerage houses have also been ordered to send daily trading details of SPCL after end of each trading day to the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange(CSE) until further order.
Some investors alleged that the regulator’s move is just an eye-wash, as it is easy to find out manipulators who are inflating share prices only to swindle small investors.
“Regulators lax monitoring has given the chance to big players to play game with the stocks,” said a market player on condition of anonymity.
On November 9 last, the commission started probing into unusual rise in share prices of Shahjibazar Power Company Limited for the second time within a span of more than three months.
The two-member committee was asked to submit the probe report by 15 working days since its formation.
Back in July 31, BSEC had formed a two-member probe panel after the company’s share price climbed 61% in just nine trading sessions from its debut.
Following formation of the probe panel, Dhaka Stock Exchange on August 11 suspended share trading of Shahjibazar for an indefinite period, but on October 20, allowed it to resume share trading following completion of probe by the Commission.
The BSEC probe team found that the company inflated its net profit to Tk28.6 crore from its original profit of Tk16.9 crore in its financial statement for nine months (July 2013-March 2014).
For the offence, the regulator fined the company’s five directors and managing director Tk55 lakh. According to market sources, share prices of Shahjibazar gained without break despite many irregularities just on the basis of rumour that the price of the scrip would increase further.
