• Friday, Feb 26, 2021
  • Last Update : 02:23 am

Newly-listed Dominage Steel’s unusual price hike raises BSEC’s suspicions

  • Published at 12:32 am January 7th, 2021
Dominage Steel

Forms committee to probe the matter


The Bangladesh Securities and Exchange Commission (BSEC) on Wednesday formed an inquiry committee to investigate the unusual stock price movement of Dominage Steel Building Systems, which made its debut on the bourse last month.


The two-member committee comprising BSEC's deputy directors Saiful Islam and Assistant Director Md. Bony Yeamin Khan will complete the inquiry and submit a report to the commission within 30 days.


The committee will investigate the reasons behind the suspicious share transaction of these companies, and will look into possible insider trading, price manipulation and securities violations if any, said BSEC Spokesperson Mohammad Rezaul Karim.

Shares of Dominage Steel began trading December 2 last year at Tk 10, and in 12 days, their prices zoomed to Tk 43.

 

And then the price began to fall, when the market itself was having a good run.


Yesterday, shares of Dominage Steel closed at Tk 31.1.

The company saw its profit fall 8.9 per cent year-on-year to Tk 9.2 crore for the financial year that ended June 30 on the back of the massive supply chain disruption brought on by the global coronavirus pandemic.


In its initial public offering prospectus, the pre-fabricated building manufacturer had projected a profit of Tk 12.8 crore for the 2019-20 financial year.

The company raised Tk 30 crore by issuing three crore shares at Tk 10 each for expanding its existing manufacturing facilities in Ashulia by 26,685 square feet (30.1 per cent), electricity installation (7.6 per cent), procurement and installation of machinery (55.8 per cent) and meeting IPO expenses (6.5 per cent).

The reason being, the demand for pre-fabricated buildings are on the rise thanks to the low investment, lesser time and higher safety that the structures provide, according to Dominage Steel’s IPO prospectus.

Prefabricated structures are constructed by manufacturing whole building components, including beams, slabs, columns and walls, and transporting these to the site final where they are assembled, very much like putting lego blocks together.

 
As the bulk of the work is done at an offsite location, it increases construction speed, ensures consistent quality and reduces wastage.

 
While prefabricated buildings have been typically used so far in power plants and factories, their use is now being expanded to other areas such as warehouses, gyms, training centres, swimming pools, basketball courts, bus stations, markets, shopping centres, showrooms, police stations, CNG stations and grain storage facilities.


In Bangladesh, other than Dominage eight other companies provide prefabricated buildings.

 

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