The stock price of ‘B’ category Gemini Sea Food more than doubled in the last six months riding on speculation and ‘irrational hype’ among investors.
Within a week, the company’s share price jumped over 22 per cent or Tk 80.6 each to close at Tk 440.50 on Monday in the falling market.
The frozen food exporter was also the day’s top gainer, gaining 7.83 per cent on the Dhaka Stock Exchange.
The company’s share price soared 104 per cent or Tk 224 each in the last six months since September 22, 2021, when its share price was Tk 216 each.
Its shares traded between Tk 136.60 and Tk 444.20 in the last one year.
Following the ‘abnormal’ price hike, the DSE served show-cause notice on the company.
The company, however in a knee-jerk response, informed the DSE that there is no undisclosed price sensitive information for unusual price hike.
Even after being served show-cause notice, the company’s share price has not stopped rising.
Market insiders said investors are rushing towards its stock without conducting a proper analysis when they see the rise in values.
“If this stock faces correction, general investors will be the losers, which will dent their confidence,” he said.
He noted that some influential investors by disseminating rumors are trying to manipulate the prices of shares of many companies.
The investors should be careful about buying overvalued stocks in order to avert any misfortune, he said.
The company declared no dividend for the year ended on June 30, 2020. However, the company disbursed a 5.0 per cent cash dividend (other than sponsors and directors) for the year ended on June 30, 2021.
Accordingly, the company had been placed in ‘B’ category from the existing ‘A’ category with effect from December 19, 2021.
Meanwhile, the company returned to the profit in July-December, 2021, after incurring losses in the previous year.
The company has reported earnings per share (EPS) of Tk 5.12 for July-December 2021 as against loss of Tk 7.92 per share for July-December 2020.
“The EPS has been increased mainly for increase of export with incremental rate and reduced cost of raw materials compared with the previous period,” said the company.
Gemini is the pioneer in exporting certified organic shrimp from Bangladesh to EU retailers in the year 2008. The company exports quality products to USA and EU countries like UK, Germany, Denmark, the Netherlands, Belgium and Russia etc.
The shrimp business had suffered severe disruptions due to the Covid-19 pandemic in 2020.
The company’s paid-up capital is Tk 46.96 million and authorized capital is Tk 400 million while total number of securities is 4.69 million.
Sponsor-directors own 33.65 per cent stake in the company while institutional investors 7.67 per cent, foreign investors 0.15 per cent and the general public 58.53 per cent as on February 28, 2022, the DSE data showed.