Weak firms dominate March gainers

Weak, Z-category companies dominated the top gainers' list on the Dhaka Stock Exchange throughout March, according to a monthly report by Sheltech Brokerage Limited, raising fresh concerns about market trends.

Analysis of the report shows that share prices of these companies surged sharply without any corresponding improvement in fundamentals, earnings, or price-sensitive disclosures – indicating that the rally was largely driven by speculative demand rather than actual financial performance.

Analysts warn that such trends can distort the market's natural price discovery mechanism and pose risks to long-term stability.

Market insiders said the surge was mainly fuelled by short-term investors seeking quick gains. They channelled funds into low-priced, high-risk stocks, artificially boosting demand and pushing up prices.

The trend was further amplified by speculative trading, where investment decisions were driven by rumours, market trends, and herd behaviour instead of company fundamentals.

Despite ongoing global economic uncertainty linked to the Middle East conflict, a segment of investors shifted toward riskier stocks. Weak, closed, and Z-category companies, in particular, attracted heightened interest, as their low prices create the perception of higher return potential with limited capital – appealing especially to retail investors.

ILFSL topped the gainers' list, with its share price doubling by 100% to Tk3.20 during the month. Premier Leasing rose 83.33%, while PLFSL and Fareast Finance gained 76.47% each. FAS Finance advanced 70.59%, and HFL climbed 67.57%.

Other notable performers included Familytex, which rose 54.55%, IFIC First Mutual Fund, which gained 40%, Atlas Bangladesh, up 37.39%, and Peoples Leasing, which increased 34.09%.

Alongside the price surge, trading activity in these stocks also increased significantly. Familytex recorded a 611.99% jump in average turnover, while HFL and Atlas Bangladesh saw increases of 555.51% and 363.23%, respectively – reflecting strong speculative interest in low-priced shares.

Experts have urged regulators to strengthen market surveillance and advised investors to remain cautious. Instead of chasing short-term gains, they recommend focusing on company fundamentals, earnings quality, and long-term prospects when making investment decisions