Ahsan Habib

Closure, resumption, and closure. This is what described Aziz Pipes in the last 10 months in a nutshell.

What seems to be a simple course for a company has not been that simple for the investors in the Dhaka Stock Exchange, as the directors of the listed plastic pipe and door producer seemed to have benefited from the price swings while retail traders found themselves on the receiving end.

When Aziz Pipes announced the closure of its operations on January 11, the company’s stock price plummeted to Tk 87 from Tk 136 in a span of three months. It rebounded to Tk 165 after the company said on August 22 that it would resume production from October 1.

But when it suspended production for the second time this year on Monday, the stock slipped to Tk 96.4 and further to Tk 88.8 on Tuesday, raising questions whether the announcement stemmed from fundamental reasons or was a part of a ploy to manipulate the stock price.

“The suspicion is much deeper because a huge price movement occurred a few days before the announcement,” said a top official of an asset management company, preferring anonymity.

Normally, a sharp price swing just before a regulatory filing indicates that there was insider trading, he said, adding the regulator should investigate.

Insider trading involves trading in a public company’s shares by someone who has non-public, material information about the stock, and this is illegal. The disclosure related to the resumption of production came on August 22, but the share of the company rose to Tk 131 from Tk 89 since July 7.

Before plunging on Monday, the stock had risen to as high as Tk 165 on September 19, data from the DSE showed.

The company closed the factory’s production activities because of a lack of working capital, complexity with bank loans, financial crisis, loan liability, raw material crisis, and lack of reserves, according to a regulatory filing on the exchange.