Islami Bank’s suspicious share price spike under scanner

The Bangladesh Securities and Exchange Commission (BSEC) ordered the Dhaka Stock Exchange (DSE) to inquire into the unusual movement of share prices of Islami Bank Bangladesh PLC.
The directive comes as prices of the shares of the Shariah-based bank skyrocketed since August 7, two days after the ouster of the Sheikh Hasina-led government by a student-led mass uprising.
Shares of Islami Bank closed at Tk 70.4 yesterday, up from Tk 32.6 on August 6 following the Bangladesh Bank’s restructuring of the board of the oldest Shariah-based bank controlled mainly by Chattogram-based business house S Alam Group, which is alleged to be a beneficiary of the previous Awami League government.
Amid an upward trend in the prices, the BSEC said it observed that the price and volume of shares of Islami Bank fluctuated significantly in recent times which seems “unusual and suspicious”.
As such, it instructed the DSE to investigate the trading of Islami Bank shares from August 6 to September 25 to determine whether there was market manipulation, insider trading or other market abuses.
The BSEC ordered the prime bourse to submit an investigation report to the Surveillance Department of BSEC within 30 working days from the date of issuance of this letter.
A top official of a leading stock brokerage firm said investors are hoping that the restructured Islami Bank will bounce back strongly. On the other hand, they think that some sponsor shareholders, who already had sold off their stakes, might try to buy the shares to take the seats again.
In this hope, stock investors are buying shares. As the share price movement occurs fast, it faces the BSEC investigation whether there was any breach of securities rules, he said.
General investors have nothing to fear if they trade following the rules, he added.
A mid-level BSEC official said the regulator goes for an investigation when it senses at least something “not normal”. If there is no breach of securities rules, the regulator will not send it to the enforcement department, he said.