Emerald Oil tops weekly gainers' list on DSE despite being non-operational

Infographic: TBS

Emerald Oil Industries, despite being out of operation, unexpectedly led the weekly stock gainers' list, with its share price surging over 26% to close at Tk31.40 on the Dhaka Stock Exchange (DSE) on Thursday (28 November).

The unexpected rally has sparked curiosity among analysts, who attribute it to speculative trading, investor optimism, or rumours of potential restructuring. 

However, market experts advise caution, emphasising the inherent risks of investing in financially unstable or dormant companies.

Emerald Oil was not alone in its unexpected rally — several other financially struggling companies also posted significant gains in the stock market last week, defying conventional trends.

Investors appeared to flock to these underdogs, driven by speculation around potential recoveries, sector-specific developments, or short-term profit opportunities, according to the market insiders.

Among the top weekly gainers, shares of Intraco Refueling surged over 21% to Tk20, HR Textile climbed 19% to Tk29.10, Doreen Power advanced 17% to Tk27.60, and BIFC rose 16.67% to Tk10.50.

According to a statement from the DSE, Emerald Oil reported that its operations are currently halted due to an insufficient gas supply to its factory. To address the issue, the company has imported a 12-tonne capacity high-pressure husk boiler, which is expected to enable full-scale production once installed.

Emerald Oil assured that production will resume shortly after the installation process is completed. Despite the operational halt, the company emphasised that it has not retrenched any employees, demonstrating its commitment to retaining its workforce during this challenging period.

Emerald Oil has yet to declare a dividend for fiscal year 2023-24 and has also failed to release its third-quarter financial statement within the stipulated timeframe.

Meanwhile, Intraco Refueling reported a 16% decline in profit, amounting to Tk2.50 crore, in the first quarter of the current fiscal year. The company also reduced its dividend significantly, announcing a 1% cash payout to shareholders for the last fiscal year, compared to a 10% cash dividend in the previous year.

HR Textile and BIFC incurred a loss in their latest financial report, while Doreen Power profit dropped in the first quarter of the current fiscal year.

Weekly market

The benchmark index DSEX of the Dhaka bourse declined by 5 points, or 0.1%, to settle at 5,193 points last week.

During the week, 213 issues advanced, while 126 declined and 51 remained unchanged.

Investors' participation in the market further declined by 18% to Tk381 crore as uncertainties over the ongoing economic and political tensions, along with prevailing social unrest, induced caution among market participants to remain watchful and stay on the sidelines.

EBL Securities in its weekly market review said the capital bourse of the country observed mixed reactions, while the benchmark index settled on a flat note by the end of the week. 

Market volatility persisted throughout the week as sellers maintained their dominance, while opportunistic investors preferred to observe the market's trend and sit on cash to look for lucrative investment opportunities following the corrections.