Rahim Textile shares jump 26% in five days, raising manipulation concerns
Market insiders suggest that this sharp rise may be part of a gradual market manipulation cycle. In such patterns, the price of one company’s shares is increased in a given week while others remain unaffected, making it easier for manipulators to avoid regulatory scrutiny
Rahim Textile Mills PLC, a component of the New Asia Group, has captured significant market attention after its shares surged by 26.29% in just five trading days, attracting investor focus despite an otherwise bearish market.
According to Dhaka Stock Exchange (DSE) data, the company's share price dramatically climbed from Tk183.7 on 15 December to Tk232 within five days, before closing the week at Tk 229.6. This sharp rally also earned Rahim Textile a spot on the DSE's top ten gainers list last week.
Market insiders suggest that this sharp rise may be part of a gradual market manipulation cycle. In such patterns, the price of one company's shares is increased in a given week while others remain unaffected, making it easier for manipulators to avoid regulatory scrutiny.
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As a low-paid-up company, Rahim Textile allows manipulators to generate artificial demand and quickly absorb shares with relatively little capital. Such practices are reportedly common, especially in a bearish market where regulators have not taken strong action against small-scale manipulations.
Financial performance
In the July-September quarter, Rahim Textile reported revenue of Tk25.73 crore, down from Tk27.50 crore in the same period last year. Despite lower revenue, net profit rose to Tk1.21 crore, compared to Tk20 lakh last year, due to reduced administrative and selling expenses and lower current tax liabilities. Earnings per share (EPS) increased to Tk1.28, up from Tk0.22 in the previous year.
The combination of rising share prices, improving profitability, and suspected manipulation has put Rahim Textile under the close watch of both investors and regulators.
Capacity expansion plan
In May 2024, the company announced plans to expand its production capacity, projecting a 24% increase in annual revenue. For machinery, civil construction, local expenses, and contingency works, Rahim Textile invested Tk13.73 crore.
Once the new machinery is installed, annual production capacity is expected to rise to 19.44 lakh yards of seamless dyed fabric, 31.50 lakh cones of sewing thread, 45 lakh draw cords, 252 lakh yards of elastic, 45 lakh yards of twill tape, 7.20 lakh yards of jacquard tape and 300 lakh pieces of heat seal products.
The expansion is expected to boost sales revenue by around 24% and improve profitability. The new machinery will allow Rahim Textile to sell products at higher prices while maintaining better margins.
