Islami Bank, Khan Brothers lead with highest returns in September amid market volatility

Infographics: TBS

Despite market volatility throughout September, investors saw the highest returns from Islami Bank and Khan Brothers PP Woven Bag, according to the monthly market wrap up by LankaBangla Securities.

The brokerage firm recently published its September report, revealing that investors achieved a 55.11% gain from Islami Bank shares, while Khan Brothers PP Woven Bag delivered a 50.48% return to its investors.

Other top performers for the month include Rahim Textile with a 25.89% return, Sonali Aansh with a 21.85% increase, and Al-Haj Textile with a 19.40% gain, according to the gainers' table.

According to the market wrap-up, the benchmark index DSEX of the Dhaka Stock Exchange (DSE) dropped by 3.10%, closing at 5,624 at the end of September. The daily average turnover also saw a 23% decline, falling to Tk669 crore. The downward trend has continued into the current month. 

Of the total traded issues, 47 advanced, 341 declined, and 8 remained unchanged last month.

According to the DSE, Islami Bank's share price rose from Tk41 on 1 September to Tk65.3 by the end of the month, pushing its market capitalisation to Tk10,000 crore for the first time in the bank's history.

Meanwhile, a total of 131.89 crore shares of Islami Bank, representing 81.92% of the bank's total shares and owned by S Alam Group have been blocked, according to the bank's September shareholding report.

In its monthly shareholding report, the bank stated that the shares have been blocked following an order from the Bangladesh Securities and Exchange Commission (BSEC) issued on 24 August.

Currently, only 18.40 crore shares of Islami Bank are available for trading on the DSE, making up 11.43% of the bank's total shares, according to the report.

After the fall of the Sheikh Hasina-led government in early August, Islami Bank shares skyrocketed over 100%. Market analysts attribute the surge to three key factors – the bank's separation from the S Alam Group, an expected investment from the International Finance Corporation (IFC), and efforts by existing shareholders to increase their stakes in the bank.

An analyst of a brokerage firm said the Bangladesh Bank Governor Ahsan H Mansur mentioned in a press briefing in August that discussions were underway with the IFC to acquire a 10-15% stake in Islami Bank, which could help revitalise the bank. If successful, the move could restore investor confidence.

On 25 September, the BSEC asked the Dhaka bourse to investigate the unusual price hike in Islami Bank's shares, which surged over 116% to Tk70.40 after the fall of the previous government till 25 September.

In an order, the commission noted that the price and volume of Islami Bank shares have fluctuated significantly in recent times, which appears unusual and suspicious.

According to the BSEC order, the country's premier bourse will investigate the trading of Islami Bank shares from 6 August to 25 September to identify the reasons behind such unusual price and volume movements, including potential market manipulation, insider trading, and other market abuses.

Meanwhile, shares of the loss-making Khan Brothers surged after the company announced last month that BSB Cambrian Education Group would be acquiring it.

According to the DSE, Islami Bank's share price rose from Tk112 on 1 September to Tk156.80 by the end of the month.

Besides, the monthly top losers are – Newline Clothings, Khulna Power and Olympic Accessories. They have been downgraded to Z category by the DSE for failing to disburse dividends.