Orion Infusion witnessed an ‘abnormal’ price spike and increase in share trading volume as its price closed at a record high of Tk 508.20 each on the Dhaka Stock Exchange (DSE) on Sunday.
The company’s stock prices jumped 248% or Tk 362 each in a month, although there is no undisclosed price sensitive information (PSI).
The company’s share price has risen more than six-fold or Tk 427 each in the past three months since June 19, when it traded at Tk 80.70 each, according to DSE data. .
The “abnormal” rise in prices prompted the DSE to serve show cause notices on the company several times last month over whether there was price-sensitive information. But the company had repeatedly informed investors via the DSE website that it had no undisclosed sensitive price information.
Even after receiving show cause notices, the company’s stock price continued to rise and gained another 8.73% on Sunday, becoming the ninth-biggest gainer of the day.
Market analysts suspect that price manipulation may have been the reason for such an “abnormal” price spike.
The company also smashed its way into the top 10 in revenue as the fourth revenue leader.
Orion Infusion’s stock price is rising too fast and the regulator should investigate whether there is wrongdoing by manipulators, an investment banker said, seeking anonymity.
The company’s stock price is up, but the company’s trading and stock price performance is not in line with its fundamentals, he said.
Orion Infusion announced earnings per share (EPS) of 1.43 Tk for July 2021-March 2022 compared to 1.12 Tk for July 2020-March 2021.
The investment banker said investors were pursuing his stock without doing proper analysis as they saw a continued rise in values.
The regulator’s oversight team was monitoring its transactions daily, an official from the Bangladesh Securities and Exchange Commission (BSEC) said.
He said general investors need to be careful with their own investments.
Listed in 1994, Orion Infusion paid 10% cash dividend in 2021. In 2020, it also paid a 10% cash dividend.
Meanwhile, Sonali Aansh Industries’ share price also jumped 62% in the month to Thursday, despite a lack of sensitive undisclosed pricing information.
The company’s share price was Tk444.80 each a month earlier on August 16 on the main stock exchange, according to DSE data.
The company’s share price, however, fell 4.12% to close at 691.50 Tk on Sunday.
The recent price surge prompted the main exchange to send a show cause notice to the company last week to find out if there was any price-sensitive information for the recent unusual price rise.
The company, however, in a knee-jerk response to the DSE, said there was no undisclosed sensitive pricing information.
Market insiders pointed to price manipulation, saying the company’s low stock volume is to blame for the artificial crisis.
“The company’s paid-in capital is very low, making it an easy target for price manipulation,” a stockbroker said.
Its paid-up capital stands at Tk 27.12 million while the total number of shares is 2.71 million.
“Influential investors, by spreading rumors, try to manipulate the stock prices of many companies to make a quick profit,” he said.
The company reported earnings per share (EPS) of Tk 3.05 for July 2021-March 2022 compared to Tk 0.75 for July 2020-March 2021.