DSE to look into unusual hike of Legacy Footwear’s share price
In just four and a half months, the company’s share price increased by a whopping 222% to reach Tk136.50 on 6 August this year. On Thursday, its shares closed at Tk94.90 apiece at the DSE.
The Dhaka Stock Exchange (DSE) is going to investigate the abnormal surge in price of Legacy Footwear shares, as per directives by the Bangladesh Securities and Exchange Commission (BSEC).
In just four and a half months, the company's share price increased by a whopping 222% to reach Tk136.50 on 6 August this year. On Thursday, its shares closed at Tk94.90 apiece at the DSE.
The Dhaka bourse has 20 working days, from the date of receiving BSEC's directive, to submit its findings to the commission.
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Recently, Legacy Footwear has issued three crore shares at Tk10 each for its three existing sponsor-directors and 14 other investors.
On 12 September, the company's shares closed at Tk113.5 each at the premier bourse.
Considering the market price on that day, the value of the new shares would have been Tk340.5 crore. But since they were issued at a rate 11 times lower than market price, they fetched only Tk30 crore.
Market insiders have alleged that general investors were deprived of the newly issued shares due to the securities regulator's approval for private placement of these shares.
As the investors did not know whether the share price would be adjusted or not, they were anxiously selling their holdings, taking losses in two consecutive sessions.
But the regulator could not take any decision in this regard, said a BSEC official seeking anonymity, adding the commission is working to resolve this for the interest of investors.
