Two stocks halted after unusual price surge

The Dhaka Stock Exchange (DSE) halted trading of the shares of two low-performing companies -- Usmania Glass Sheet and Daffodil Computers -- yesterday after their prices rose unusually.

According to a DSE disclosure, trading of Usmania Glass shares was suspended for the rest of the trading day “due to an unusual rise in the share price and trading volume”.

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Last week, the company informed investors that it had no undisclosed information behind the sharp rise in its share price. Despite the disclosure, the stock continued to climb, prompting the DSE to halt trading last Thursday.

The shares continued their upward trend over the following two trading days, gaining 9.93 percent yesterday.

The junk stock has doubled in value over the past month, reaching Tk 74 yesterday, despite the company not paying any dividend for the last eight years.

In a separate disclosure, the DSE also halted trading of Daffodil Computers shares for the rest of the trading day due to an “unusual price hike”.

Last month, the ‘B’ category company told investors that it had no undisclosed information to explain the rise in its share price. Despite the disclosure, the stock continued to gain and rose 70 percent over the past three months to Tk 163.

DSE officials said such trading suspensions are intended to alert investors to be cautious about investing in companies whose share prices are rising without any apparent reason, particularly low-performing or junk stocks.

They added that the DSE will continue taking such measures to protect investors from investing in junk stocks.