The Dhaka Stock Exchange (DSE) has issued a stark warning to investors after identifying at least 62 listed companies as high-risk stocks, citing prolonged operational shutdowns, severe financial distress and growing uncertainty over their future viability.
In a major investor-alert initiative, the country's premier bourse published separate lists of non-operational and financially troubled companies, urging market participants to exercise extreme caution before investing in these securities.
The move comes amid growing concerns that speculative trading is driving up the prices of fundamentally weak companies, exposing retail investors to potentially heavy losses.
According to the DSE, 32 listed companies are currently non-operational, with many having remained inactive for extended periods. The list includes Apollo Ispat, Aramit Cement, Aziz Pipes, Baraka Power, BD Welding, Emerald Oil, Familytex, Khulna Power, Meghna Condensed Milk, Meghna PET, Prime Textiles, RSRM Steel, Regent Textile Mills, Shyampur Sugar Mills, Usmania Glass and several others.
Despite the alarming status of these firms, investor appetite for risky stocks showed little sign of fading. In Thursday's trading session, share prices of 22 out of the 32 non-operational companies climbed, while only six declined and four remained unchanged. Hamid Fabrics, Prime Textiles and New Line Clothings emerged as the day's top gainers among the inactive firms.
Market observers described the rally as a troubling sign of speculative excess, with investors continuing to pour money into companies that have little or no operational activity.
The DSE has also flagged a separate group of financially distressed firms based on auditors' assessments. Auditors identified 42 companies facing "going concern" risks, meaning there is significant doubt about their ability to continue operations because of liquidity shortages, mounting liabilities and other financial challenges.
After excluding companies already classified as non-operational and those under trading suspension, around 30 companies remain in the financially distressed category. These include financial institutions, textile manufacturers, pharmaceutical firms and industrial companies struggling to sustain operations.
Market insiders said the publication of the lists is effectively a "red alert" to investors, warning them against chasing stocks with weak fundamentals and uncertain futures.
"The objective is to improve investor awareness and reduce exposure to highly vulnerable companies that could cause substantial losses," a market analyst said.
The warning comes as regulators intensify scrutiny of unusual price movements in weak stocks. Several companies with little operational activity have recently witnessed extraordinary share-price surges despite deteriorating business conditions.
Trading in two such companies"Shyampur Sugar Mills and Sonargaon Textiles"has already been suspended under regulatory directives following concerns over abnormal market activity.
The latest disclosure marks the second phase of the DSE's campaign to spotlight risky securities and strengthen investor protection measures in a market increasingly challenged by speculative trading.
Analysts say the contrast between the deteriorating condition of many listed firms and the relentless rise in their share prices underscores the urgent need for greater investor awareness and stricter market discipline.
"The DSE has sounded the alarm. The real question is whether investors are listening," one market expert remarked.
