Meghna condensed milk tops the charts
FE REPORT |
July 25, 2022 11:02:17 a.m.
July 28, 2022 10:02:27
Junk stocks continued to dominate the top earners chart as four “Z” category companies made Sunday’s top 10 list despite the market continuing to decline.
Junk stocks have also featured frequently on the list of top gainers in recent weeks, where heavy stocks, including blue chips, have continued to decline.
A company’s stock is said to be junk when its commercial production is halted for six consecutive months, fails to hold annual general meetings on time, or fails to pay dividends to shareholders.
Some poorly performing companies have frequently squeezed their way into the DSE’s list of top gainers, based on a rumor that investors are pouring money into these stocks, an asset manager said.
“Underperforming stocks have maintained their dominance in the list of winners where stocks of well-known companies are suffering losses, which is not a good sign for a healthy stock market,” he said.
He noted that influential investors, by spreading rumors, are trying to manipulate the stock prices of many low profile companies in the falling market to make quick profits.
He said investors were chasing these stocks without doing any proper analysis as they saw a continued rise in values.
“If these stocks undergo corrections, investors will be the ultimate losers,” he said, adding that investors should be careful when buying junk stocks to avoid misfortune.
Among junk stocks, Meghna Condensed Milk posted the highest gain of 9.82% to close at 43.60 Tk on Thursday.
Over the past month, the company’s share price has jumped 50% while the company’s share has doubled over the past three months despite the company suffering huge losses and not having paid dividends for a long time.
The company reported a net loss of Tk 85.44 million in nine months from July 2021 to March 2022, compared to a loss of Tk 84.22 million in the same period of the previous year.
Additionally, Meghna Condensed Milk incurred a net loss of Tka 132.17 million for the year ended June 30, 2021, while the company’s liabilities exceeded its total assets by Taka 442.14 million.
The FAS Finance scam was the second highest gainer on Sunday, climbing 9.80% to close at 5.60 Tk each.
The share of the non-banking financial institution jumped 15% in one month.
The share price of another scam victim – International Leasing & Financial Services – also rose 9.80%, becoming the third biggest gainer. His share closed at Tk 5.60 each.
Class ‘Z’ First Finance was the fourth highest gainer, climbing 9.61% to close at 5.70 Tk. The company has also not declared a dividend since 2019.
The share price of Meghna Pet Industries, another junk stock, also rose 8.95% to close at 42.30 Tk on Sunday. Its share soared about 20% in a month as the company failed to pay a dividend for a long time.
Fareast Finance — another junk stock — also jumped 8.93% to close at 6.10 Tk. The company has also failed to declare a dividend since 2016.
Shares of Safko Spinning also rose 7.42%, Union Capital 7.14%, Metro Spinning Mills 6.41% and shares of Progressive Life Insurance also climbed 6.38% on Sunday.