Rumour fuelled rally sends Sonali Aansh shares up 63%
Market insiders said Sonali Aansh’s small paid-up capital makes it an easy target for manipulation
The share price of Sonali Aansh Industries, a publicly listed exporter of jute goods, surged 63% in three months despite the absence of any price-sensitive disclosures.
The surge comes amid an ongoing inquiry by the Bangladesh Securities and Exchange Commission (BSEC) into possible manipulation of the company's share price during the 2023-24 fiscal year.
Market insiders said Sonali Aansh's small paid-up capital makes it an easy target for manipulation. They noted that the recent surge appeared to be fuelled by rumours that the company might declare a 100% stock dividend for FY25 to raise its paid-up capital to Tk30 crore, similar to its dividend announcements in 2022 and 2023.
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Insiders further added that speculations like the company may report strong April-June earnings are also being used by manipulators to influence the share price.
However, the company has not disclosed any material information during this period.
Company Secretary Md Habibur Rahman Khan told The Business Standard that the firm has no undisclosed, price-sensitive information tied to the price rally.
"The factory is operating normally, and new machinery has been installed to expand our diversified product line," he said.
In June, the company's shares traded around Tk140. Since then, the price has climbed steadily, closing at Tk227.80 yesterday.
Also in June, BSEC formed a three-member inquiry committee to investigate alleged manipulation of Sonali Aansh's shares during the 2023-24 fiscal year. The committee was tasked with probing suspected price manipulation, insider trading, serial trading, and the creation of artificial demand.
It was also instructed to review the company's FY24 financial statements and, if necessary, examine other related documents as part of the investigation.
The company's diversified products include shoe uppers, espadrilles (jute shoes), ladies' shoes, children's shoes, shopping bags, fashion bags, home hardware, home textiles, home slippers, jute baskets, and printed jute fabrics, among others.
Despite a significant rise in revenue, Sonali Aansh's net profit dropped by 33% to Tk5.68 crore during the July-March period of FY24, compared to Tk8.48 crore in the same period of the previous year.
In the first nine months of FY24, the company's revenue surged to Tk110.46 crore, up from Tk50.41 crore a year earlier. However, its earnings per share (EPS) fell sharply to Tk5.23, down from Tk15.64 in the previous year.
