DSE asked to probe abnormal price hike of low-cap firms

The stockmarket regulator yesterday asked the Dhaka Stock Exchange to look into the abnormal price hike of some low-cap companies of late.The DSE will have to investigate the 12 firms that gained nearly 50 percent to 150 percent in the last 15 trading days, and submit a report in 15 workdays, the regulator said in a statement.The companies that saw an unusual price hike in the last 15 trading days are: Legacy Footwear, Desh Garments, BD Autocars, Rahima Food, Information Services Network, Monno Jute Stafflers, Modern Dyeing and Screen Printing, Anwar Galvanising, JMI Syringes and Medical Devices, Hakkani Pulp, Intech Online, and Al-Haj Textile.A total of 12 companies gained in between 100 percent and 244 percent from July 31 to September 17, three companies rose more than 90 percent and 14 firms more than 50 percent, DSE data showed.The firms with capital ranging between Tk 40 lakh and Tk 31 crore saw an abnormal price hike amid a slow mood in the market, which led investors to buy shares at higher prices that may cause a massive loss in their portfolios.The DSE has already suspended trading of two firms—CVO Petrochemical Refinery, and Rahima Food—for an indefinite period as their prices were rising abnormally.The regulator also gave merchant banks and stockbrokers six more months to restructure their clients’ margin accounts, whose deposits drop below 150 percent of debit balance, according to the statement.The discretionary power will allow stockbrokers and merchant bankers to make “buy-sell” decisions until March 2014 without referring to the client for every transaction to recover the losses in those accounts.