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The share price of Paramount Insurance Company is soaring without having any undisclosed price sensitive information.
Within a week, the company’s share price jumped more than 53 per cent or Tk 23 each to close at Tk 66.10 on Thursday. Its share price was Tk 43.10 a week ago on June 2.
The non-life insurer was also the week’s highest gainer.
The company’s share traded between Tk 18.20 and Tk 69 each in the last one year.
Following the ‘abnormal’ price hike, the Dhaka Stock Exchange (DSE) served show-cause notice on the company on Thursday.
The company, however in a knee-jerk response informed the DSE Thursday that there was no undisclosed price sensitive information for recent unusual price hike of its shares.
Even after being served show-cause notice, the company’s share price has not stopped rising, surging 4.92 per cent further on Thursday.
A leading broker, however, said the securities regulator’s ultimatum to non-compliant directors of listed firms to ensure holding of minimum 2.0 per cent shares led the buy pressure on its shares as three directors of the company has no minimum 2.0 per cent shares.
Even one director has no share in the company while two others have 0.19 per cent and 0.18 per cent shares in the Paramount Insurance, according to market insiders.
The securities regulator has recently asked 61 directors of 22 listed companies to ensure a minimum 2.0 per cent shares in their own companies within 45 days to continue their directorship.
If any director fails to comply with the 2.0 per cent shareholding rules, his/her position would be automatically vacated.
Of the 22 companies, 14 are from the insurance sector, which have 49 non-compliant directors. So the companies, whose directors have failed to hold the minimum shares, will have to buy shares within the 45-day time frame to comply with the minimum shareholdings rules.
Following the securities regulator’s ultimatum, the insurance sector companies also dominated the week’s top gainers’ chart as eight out of top 10 gainers from insurance sector.
The insurance companies which were in the chart of week’s top gainers are: Global Insurance with 24.11 per cent gain, followed by Janata Insurance, 20.41 per cent, Provati Insurance, 20.10 per cent, Purabi General Insurance, 20 per cent, Agrani Insurance, 18.75 per cent, Eastern Insurance, 17.45 per cent and Bangladesh National Insurance gained 12.28 per cent last week.
An analyst advised the investors to make their valuable investment decisions based on company fundamentals, technical analysis, price level, disclosed information and most importantly, avoiding rumour-based speculations.
(FE)
