Shares of S Alam Steel, Shinepukur almost tripled in one month

While S Alam Cold Rolled Steels and Shinepukur Ceramics Ltd have not been faring well in their business, the share prices of the companies almost tripled in the past month, raising the eyebrows of stock market analysts.

Stocks of S Alam Cold Rolled Steels went from Tk 9 to Tk 31 as of last week. Meanwhile, stocks of Shinepukur Ceramics soared from Tk 11 to Tk 31.

Several brokerage houses believe rumours have been raising people's interest in the two companies.

S Alam Group Chairman Saiful Islam is the chairman of the steel company. He had close ties with deposed prime minister Sheikh Hasina and has been living abroad since the Awami League-led government was ousted in August last year.

Last December, the company informed through a disclosure that "due to unforeseen circumstances" beyond its control, it has been facing significant challenges that have made it "troublesome to continue regular production".

"Due to recent restrictions on opening letters of credit placed by banks, we are facing a shortage of a couple of chemicals and raw materials and have no option but to stop production as well as try to resolve the matter," it said.

However, the company said this had not affected its business, which was continuing to deliver manufactured goods.

In January, one of its assets was put up for auction by a bank seeking to recover loans worth Tk 2,003 crore.

In response, the company released another disclosure saying, "Due to unforeseen circumstances beyond our control, we have been facing significant challenges such as freezing of bank accounts and restrictions in the opening of letters of credit by banks.

"As a consequence, the lender has floated tenders for the sale of the mortgaged assets and this happened amidst the country's recent political crisis that has directly affected us."

The company also said that it was going to take legal steps against the bank.

Despite all this, the company's share price started to soar the following month, meaning in February.

The company has already responded three times against queries from the Dhaka Stock Exchange (DSE), stating that it has no undisclosed price-sensitive information that could have led to the unusual price hike and increase in the trade of its shares.

The steel company is yet to publish its financial reports for the 2023-24 period.

Its earnings per share stood at Tk 0.28 during the first nine months of the fiscal year and Tk 0.60 in the same period of the previous year.

On the other hand, Shinepukur Ceramics' sponsor Salman F Rahman, who was an adviser to the former prime minister, is now in jail.

The company announced last October that it had decided to provide a 2 percent cash dividend to shareholders although its earnings per share fell 60 percent to Tk 0.16 in fiscal year 2023-24.

In January, it published its first half-yearly financial report for the year 2024-25 while its earnings per share stood at Tk 1.35 in the negative. It was Tk 0.02 in the same period of the previous year.

Yet, the company's stock price started to rise from mid-February. The company twice responded to queries from the DSE, saying it has no undisclosed price-sensitive information.

Yesterday, stocks of both companies dropped.

S Alam Cold Rolled Steels plunged 9 percent and Shinepukur Ceramics fell 5 percent.

A mid-level official of the Bangladesh Securities and Exchange Commission, preferring anonymity, said trading of the shares of the companies was under their scanner.