Islami Bank share price reaches 12-year high

Following the downfall of the Sheikh Hasina-led government, Islami Bank's shares surged by 67% in just one month, reaching a 12-year high, on the Dhaka Stock Exchange (DSE) despite its shares traded under floor price. 

Islami Bank topped the gainers' list on Sunday (22 September) as its share price climbed by 9.92%, closing at Tk54.30. During the session, a total of 31.10 lakh shares were traded, amounting to a value of Tk16.29 crore.

Market insiders said Islami Bank's shares have been above Tk50 each since April 2012. In the last month, its market capitalisation increased by Tk3,494 crore, reaching Tk8,742 crore after 2012.

According to the insiders,  investors' confidence in the shares of Islami Bank increased after the Bangladesh Bank freed Islami Bank from S Alam Group after the fall of Hasina-led government. The central bank recently removed nominated directors of S Alam Group from the board of the bank and formed a new board.

Besides, there are reports that several business groups are buying shares to become directors on the board of Islami Bank. Therefore, despite the floor price imposed on the bank's shares, its share price is increasing, they added.

In 2017, S Alam took over the Islami Bank. At that time the bank's board members and managing director were forced to resign. After that, a large part of the foreign investment institutions in the ownership sold the shares of the bank.

It is alleged that S Alam took over the bank and withdrew a huge amount of money from it in the name of anonymous loans. Currently, the Bangladesh Financial Intelligence Unit, CID and ACC are investigating the allegations brought against the group and its chairman Saiful Alam Masud.

According to sources, the new board of directors of Islami Bank, in its first meeting on 27 August, decided to re-audit all loans taken from the bank in the last seven and a half years when it was under the control of S Alam Group.

"An initiative has been taken to find out who has taken loans in this period, in what processes and whether these loans have proper collateral or not," an official of the bank who was present in the meeting told The Business Standard.

The Bangladesh Bank in August dissolved the Islami Bank board that was under the control of S Alam and appointed a new five-member board to oversee the bank's operations. 

Obayed Ullah Al Masud, who previously served as managing director of both Sonali Bank and Rupali Bank, was made the chairman.

Daily market

The prime index of the Dhaka bourse ended on a flat note following a short-lived positive momentum till the mid-session as sellers regained control due to the weakened strength of the market trend. 

DSEX, the broad index of the DSE, edged down by 0.3 points and settled at 5,735 points, while the blue-chip index DS30 11 points to close at 2,094.

EBL Securities, in its daily market review, said the market saw mixed reactions as the session began with an upbeat momentum, but risk-averse investors' subsequent cautious selling approach to realise the short-term gains amidst an uncertain market momentum eroded the early session optimism.

Meanwhile, market turnover slightly increased by 14% to Tk680 crore. 

On the sectoral front, bank issues exerted the highest turnover, followed by pharma and food sectors.

Sectors mostly displayed dismal returns, out of which jute, paper and life insurance exerted the most corrections on the bourse, while bank, textile and mutual fund exhibited marginal returns.