27 Companies Downgraded to ‘Z’ Category on Dhaka Stock Exchange
In a significant move, the Dhaka Stock Exchange (DSE) has downgraded 27 companies to the ‘Z’ category, effective Thursday, September 26. This decision follows directives from the Bangladesh Securities and Exchange Commission (BSEC) due to various non-compliance issues with securities laws.
Companies Affected
The companies affected by this downgrade include:
- Associated Oxygen
- Indo-Bangla Pharma
- Beach Hatchery
- Desh Garments
- Advent Pharma
- Khulna Power
- Pacific Denims
- Fortune Shoes
- Energypac Power Generation
- VFS Thread Dyeing
- Shepherd Industries
- SK Trims
- Lub-rref Bangladesh
- Libra Infusion
- Western Marine Shipyard
- Phoenix Finance
- Olympic Accessories
- National Tubes
- National Bank
- Miracle Industries
- GSP Finance
- FAR Chemical
- Central Pharma
- BD Thai
- Bay Leasing
- Atlas Bangladesh
- Anlima Yarn
Reasons for Downgrade
The primary reasons for this downgrade are violations of securities laws, including failure to pay at least 80% of declared dividends and not declaring dividends for two consecutive years. The BSEC has strictly enforced these regulations to ensure transparency and protect investors’ interests.
Impact on Trading
Stocks in the ‘Z’ category face stricter trading conditions. They are subject to delays in share settlements and are not eligible for margin loans. The settlement cycle for ‘Z’ category stocks is set at T+3, compared to T+2 for other categories. This change aims to mitigate risks associated with non-compliant companies and safeguard the market’s integrity.
Market Reaction
Following the announcement, there was a noticeable decline in the share prices of these companies. Investors reacted swiftly to the news, reflecting concerns over the companies’ compliance and financial health. This move is expected to prompt other companies to adhere more strictly to regulatory requirements to avoid similar downgrades.
A Step Towards Market Integrity
This action by the DSE and BSEC underscores a commitment to maintaining a transparent and fair trading environment. By holding companies accountable for their compliance, the regulators aim to foster a more robust and trustworthy market for all stakeholders.
This development serves as a reminder to all listed companies about the importance of adhering to securities laws and maintaining good corporate governance practices. It also highlights the regulators’ proactive stance in ensuring market discipline and protecting investor interests.
