Oimex Electrode Ltd made a flying debut on the Dhaka Stock Exchange yesterday with its shares rising more than tenfold.
The opening price of the company’s Tk 10 share was Tk 82 and it went up to Tk 120 during the trading session. It however closed at Tk 114.70.
UCB Capital Management acknowledged the jump in its daily market analysis.
Oimex, one of the leading suppliers of steel products such as electrodes, nails and galvanised wires, was the highest traded share of the day with stocks worth Tk 68.74 crore changing hands.
The price hike in the first trading session was unusual, said a senior executive of the DSE on condition of anonymity.
Oimex’s shares jumped to Tk 116 within a minute of the day’s trading.
The company was asked informally about the unusual price hike but it stated to be unaware of the reason, the executive said.
He said the DSE has nothing to do with the unusual price movement as it does not have any tool to control prices. “Investors will have to be cautious when purchasing shares at high prices.”
The executive said the DSE would introduce market-maker, a tool used to control share price, within six months to stop abnormal price hike of IPO (initial public offering) shares.
He said the maximum share price of Oimex should be Tk 25 if the net asset value of Tk 16.96 of the company is taken into consideration, but investors were buying the shares even at Tk 120. “It shows investors’ lack of awareness.” Oimex Electrode’s earnings per share declined to Tk 2.09 in the year ending on June 2017 from Tk 2.19 in the same month a year ago, according to the company’s declaration posted on the DSE website.
Set up in 2005, the company declared 10 percent stock dividend in the last fiscal year.
Stocks at the DSE finished in the green amid buoyant transactions.
The benchmark index, DSEX, rose 31.52 points to 6,104.51. Daily turnover increased 24.79 percent to Tk 671.98 crore.
The market started the session on a flat note and the activity received a boost in the last hour. Banking equities helped pull the market, said UCB Capital Management.
Banking shares posted a gain of 1.48 percent, while fuel and power sectors shed 0.15 percent.