DSE downgrades 27 stocks

The Dhaka Stock Exchange yesterday decided to downgrade 27 companies to the Z or junk category for failing to properly pay dividends to shareholders in the last two years.

Out of the 27 companies, 14 failed to pay at least 80 percent of the dividends that they had announced for their shareholders and the remaining 13 failed to make any dividend payments.

According to the rules of the Bangladesh Securities and Exchange Commission, a company will be listed under the Z category if it fails to pay dividends to shareholders for two years.

The same will be applicable for those failing to provide at least 80 percent of dividends or hold annual general meetings for two years or those which have kept their factories closed for six months.

The 27 include Associated Oxygen, Indo-Bangla Pharmaceuticals, Beach Hatchery, Desh Garments, Advent Pharma, Khulna Power Company, Pacific Denims, Fortune Shoes, Energypac Power Generation, VFS Thread Dyeing, Shepherd Industries, and SK Trims and Industries.

The others are Lub-rref (Bangladesh), Libra Infusions, Western Marine Shipyard, Phoenix Finance and Investments, Olympic Accessories, National Tubes, National Bank, Miracle Industries, GSP Finance, Far Chemical Industries, Central Pharmaceuticals, Bd Thai Aluminium, Bay Leasing and Investment, Atlas Bangladesh, and Anlima Yarn Dyeing.

In connection to this, the DSE highlighted that all stockbrokers and merchant banks must refrain from providing margin loans for the purchase of shares of companies under the Z category, let alone the 27.

After the DSE announced its decision to downgrade the 27 companies, their share prices dropped between 8 percent and 9.6 percent yesterday.